Fed Policy In A New Economy

This is a crucial moment in the evolution of the New Economy. On the one hand, the technological, policy, and management changes that helped create the conditions for faster growth with less inflation in recent years are still present. At the same time, worries grow that the economy is in danger of overheating and causing inflation. Indeed, core consumer inflation over the last six months has been running at 2.5%, the highest level since mid-1998.

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