Skip to content
Opinion
Bill Dudley

The Fed Knows What It Needs to Do. Now Comes the Tricky Part.

The central bank has to balance timing, magnitude and the mix of levers in tightening monetary policy.

Fed Chair Jerome Powell is going to need the whole playbook.

Fed Chair Jerome Powell is going to need the whole playbook.

Photographer: Graeme Jennings (pool)/AFP/Getty Images

The Federal Reserve’s pivot from easing monetary policy to tightening is nearly complete. That leaves a number of questions about how the central bank will accomplish its goal, from timing to magnitude to mix. 

Why did Chair Jerome Powell and the Federal Open Market Committee statement provide so little forward guidance on the likely path of short-term rates? Both signaled a March rate increase was almost certain, but there was very little beyond that.