Analysis
Post Fed Meeting Discussion
In this episode
Fed Day happened yesterday, and the committee raised the federal funds rate a quarter point. Our honest first reaction: the data didn’t obviously call for it.
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Show notes
To say we were confused by the hawkishness would be an understatement. The Federal Reserve stated that the inflationary pressures are due to global oil supply, something they have zero affect on, but still made the move. Blog and video here.
The part worth repeating
More importantly, the change in the dot plot from several cuts in June to several hikes today is confusing as well. Especially when you look at the data and it is actually better now, so why didn’t they hike in the summer?
Common questions
What is the strategy?
Lowering inflation. Theoretically raising the funds rate will help lower inflation. So this could be a good thing if it does have that affect.
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