How Fed Learned to Stop Worrying and Love Zero
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Jan. 24 (Bloomberg) -- For anyone whose financial memorydates back to a time when the overnight interbank rate was indouble digits, the Federal Reserve’s announcement last monththat zero was here to stay was nothing short of stunning.
To wit, the funds rate isn’t going to budge at least untilthe unemployment rate drops to 6.5 percent. (There are othercontingencies that I’ll get to later.) Minneapolis Fed PresidentNarayana Kocherlakota wants a 5.5 percent unemploymentthreshold. Anyone for 5 percent? Do I hear 4.5?