Fed's Mission Is Accomplished. So Why No Change?
Full employment has essentially been achieved. Inflation is on target. Rates would be rising, if policy makers' priority were the U.S. economy.
Gray skies are gonna clear up. Wait. They already have.
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The Fed's mission is accomplished -- unless it has some ulterior motive. Thursday we saw jobless claims hovering near a 40-year low, so employment is thriving. Friday's data showed that consumer price inflation was continuing to firm and that retail sales were strong.
All of which points to: mission accomplished. The strong and growing level of wage growth along with continued declines in labor slack suggest that full employment has essentially been achieved. Even U6, the most broad-based measure of unemployment and underemployment, is now at the same levels it was at in the summer and autumn of 2004 when the Fed began an aggressive rate tightening cycle.