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What's `Gradual' in Fedspeak? Markets Obsess Over Latest Riddle
When Loretta Mester, president of the Federal Reserve Bank of Cleveland, took queries from a local audience on Nov. 13, it didn’t take long for someone to pose the question that now obsesses the investment world. “What does ‘gradual’ mean?” asked Craig Evers, an economist at hedge fund firm Brevan Howard Inc. The answer, when it eventually comes, will set a course for financial markets worldwide. Barring an upset, the Fed is expected to raise its benchmark interest rate in December in what may be the most anticipated policy move in its 100-year history. Because investors now think they know when the initial ... (full story)