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Fed Aiming to Restrict Credit, Raising Eventual Recession Risk
Federal Reserve policy makers have abandoned the notion that they can bring the U.S. economy in for the perfect soft landing -- when inflation settles at its target, growth throttles back smoothly to trend and monetary policy shifts to neutral. Instead, they’re prepared to step on the brakes. “Nearly all” Fed officials believe that the central bank will have to restrict the economy by pushing interest rates above their long-run equilibrium level in order to achieve their aims, according to the minutes of their Dec. 12-13 meeting released on Jan. 3. “The Fed may not have the luxury of a simple monotonic glide ... (full story)