Fed Ponders Catchup With Economic Theory Signaling Rates Too Low
- Policy makers keep option of June rate increase on table
- Based on Taylor Rule, Fed risk falling behind curve in 2016
Why Are Expectations of a Fed Hike Falling?
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When does treading carefully lead to falling behind?
Federal Reserve officials signaled last week that they expect to raise interest rates twice this year, while investors see only one move. If economic theory is any guide, even the central bank’s more hawkish outlook would still leave the target for the benchmark policy rate way too low.