PLW - A Confident Fed Contemplates An Uncertain Economy

• For much of the time since the Fed first took action to shore up the economy after the pandemic started, the timeline for lifting off the current zero lower bound Fed funds target has been 2023.
• Now, however, a full half of the FOMC members expect that rates will begin to go up in 2022, and a majority expect there will have been at least three consecutive rate hikes by the end of 2023.
• Before anything happens with interest rates, though, the first order of business is doing away with the current program of Fed purchases of $120 billion of Treasuries and mortgage-backed securities each month.
• TheFed’s problem with stagflation is that it can’t simultaneously solve both sidesof its twin mandates of stable prices and full employment.

For further details see: