Opinion
Why the Fed might be at ‘neutral’ already on monetary policy
The peak in the federal funds rate during the current cycle will be lower than otherwise because the combination of quantitative easing and the strong dollar are equivalent to at least a 1 percentage point increase.
Edward YardeniMost Fed watchers seem to spend more time criticising the US Federal Reserve than watching it. It’s easy to do. Anyone can play the game and attacking the Fed is like shooting at sitting ducks: officials at the central bank can’t respond directly given their public role.
Recently, Fed chairman Jay Powell has been skewered by his critics for saying the federal funds rate was now at “neutral” at his July 27 news conference just after the policy-setting Federal Open Market Committee had voted unanimously to raise its benchmark federal funds rate range by 0.75 of a percentage point to 2.25 per cent to 2.50 per cent.
Financial Times
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