Central Banks
Three Reasons Why US Financial Markets Are Cruising Through a Long Fed Hold
- Powell strategy suggests wariness over ‘financial accelerator’
- Government spending and private credit diminish typical risks
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More than two years into the most aggressive Federal Reserve monetary tightening in four decades, the big surprise is that the world hasn’t fallen over.
While US interest rates at 23-year highs are causing pockets of pain, there’s nothing like the systemic problems that so often wrecked expansions in the past. The Fed has held the policy rate at 5.25% to 5.5% for about a year and is expected to leave it unchanged at their two-day policy meeting this week.