The Fed’s Policy Conundrum
The Fed announced last Wednesday that it would keep interest rates unchanged, a decision that markets largely expected. In its statement, the Fed upgraded its view of the economy to growing at a “strong” rate for the first time since 2006, a view encapsulated by last quarter’s strongest gross domestic product (GDP) growth since 2014. Fiscal stimulus has fueled strong business, consumer, and government spending, and the job market has continued to tighten, with the unemployment rate sitting at its lowest point of the expansion.
Economic Growth Supports Higher Rates
In a vacuum, the macroeconomic backdrop suppo... Read more