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The Fed Has Not Stopped Trying to Stimulate the Economy
The most important thing to understand about the Federal Reserve’s decision Wednesday is that it has decided to keep the monetary policy dial set to “stimulate.” Indeed, by conventional measures, monetary policy is currently dialed in to as expansive a setting as it ever has been — not only in this recovery, but arguably in the history of the nation. Let’s start with the Fed’s standard tool, the federal funds rate, which is set to remain at essentially zero percent, as it has been since late 2008. While we may now be used to it, this was almost unimaginable a generation ago. When the Fed ran out of room ... (full story)