Re:U.S. annual inflation rate drops to 8.5%
by starkd on Wednesday August 10, 2022 @10:22AM
(#32412458)
But I think a lot of the Fed's strategy was jawboning the rate increases - aka offering "forward guidance". Notice how the rate hikes were fairly measured and tepid. They didn't even start the actual QT until a few months ago. There's a limit to how effective jawboning is, and it requires the public have credibility in the Fed to do so. Eventually, you have to back it up with actions.
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Re:U.S. annual inflation rate drops to 8.5%
by chaorace on Thursday August 11, 2022 @09:39AM
(#32425365)
That's a fair point, but let's also consider that markets tend to overreact to rate hikes. The public's languid response to the Fed's inching of the interest rate may actually be a desireable outcome.
If they were truly going for shock & awe, it would have been much more effective do one single 2% hike rather than breaking it up over 3 adjustments.