The Fed can afford to loosen policy
As (nearly) the world’s most hawkish central bank, the Federal Reserve is right to start monetary loosening, writes Steve Kamin
By the middle of September, financial markets had worked themselves up into a lather as they anticipated the Fed’s first rate cut of this policy cycle. It had indeed been a surprisingly long wait. That’s partly because markets and the Fed had occasionally been wrong-footed by data surprises, such as the uptick in inflation in the first quarter of this year. And it’s partly because the Fed had been exceptionally cautious in taking its foot off the brakes.
When headline CPI inflation hit 9% in mid
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