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Act or Wait? Fed Debate Heats Up After Inflation Misses Target
Former Federal Reserve Chairman Alan Greenspan, in year nine of a U.S. economic expansion, conceded in 1999 that patience was sometimes a better policy than his doctrine of preemptive interest-rate moves because “the future at times can be too opaque to penetrate.” For some Fed officials, these days look like one of those times to wait for clarity. Faith in preemption -- the Greenspan-era strategy of setting of monetary policy based on forecasts to get ahead of where the economy was going -- is beginning to falter among some officials. That’s because in the current expansion’s ninth year, inflation isn’t ... (full story)