The Fed Is Moving More Slowly Than the Recovery
There’s a disconnect between what’s happening in the economy and what the central bank is saying.
Powell is taking his time.
Photographer: Drew Angerer/Getty Images
The Federal Reserve has lately come under increasing pressure to shift its thinking on inflation and monetary policy. A course correction was indeed overdue. At this week’s meeting of its policy-making committee, the Fed budged — but not quite enough.
The central bank held interest rates at zero and announced no plans to taper its $120 billion-a-month bond-buying program. But its closely watched “dot plot” showed a majority of its officials now projecting at least one rise in interest rates in 2023. A growing minority — seven of the 18, up from four in March — say they now expect an increase next year to be appropriate. Financial markets took note, and yields moved up a notch.