, Columnist
Have a Little Sympathy for the Federal Reserve
Monetary policy is unavoidably complex, and anyone who says otherwise is not to be trusted.
His job is not simple.
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Are interest rates too high or too low? A simple enough question, you might think, demanding a straightforward answer. If only.
The problem is that the system connecting the Federal Reserve’s main policy instrument — the setting of interest rates — to the things it ultimately wants to affect — inflation and employment — has many moving parts. You can’t answer the question without understanding the context.