Economics
The Pause that Perplexes
After the Fed’s move to the sidelines on Aug. 8, experts are widely divided on the outlook for growth and prices. Stagflation, anyone?
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No surprises from Ben Bernanke this time. Investors got what they wanted on Aug. 8 when Federal Reserve policymakers, citing a slowing economy and prospects for moderating inflation, voted to keep the Fed funds target rate at 5.25% after 17 consecutive tightenings.
But after the good news, investors pondered whether the central bank would be able to continue holding off further rate increases. The Dow sold off 46 points, while Treasuries finished flat.