If it were done when ’tis done, then ’twere well it were done slowly. That is official Federal Reserve Board going-forward policy. The announcement of the Fed’s first interest rate increase in almost a decade, an upward move of 0.25 percent from near zero, says, and twice, that future increases will be “gradual”. That was chairwoman Janet Yellen’s main message – abrupt is bad, “gradual adjustment in the stance of monetary policy” is the way to go to avoid past central bank errors by waiting so long that it has to jack rates up abruptly, throwing the economy back into recession. The mid-range forecast of Fed policymakers is that the federal funds rate – an important tool in the Fed’s policy kit – will rise to 1.375 percent at the end of 2016, 2.375 percent at year-end 2017, 3.25 percent at the end of 2018, and then to 3.5 percent for the longer term.
Real journalism.Trusted by millions.
Unlimited access to in-depth reporting, expert analysis, and the stories that shape our country.
Already a member? Log in