By Eric Winograd
The Fed left its benchmark rate unchanged this week, but also signaled a very high probability of cuts later this year. Historically, rate cuts have been a sign of trouble - typically made in response to slower growth and rising unemployment. But this time around, growth data aren't showing much weakness. What's the story?
We see the Fed's proactiveness as a welcome and meaningful change in the way it reacts to incoming data. Historically, the Fed has waited for clear evidence that the economy was struggling before cutting rates. More often than