Extreme criticism of the Federal Reserve (Fed) over the last year and a half has put Fed officials on the defensive, which means that it went from a highly benign view of inflation (i.e., it is transitory, and we can wait) to a very risk averse stance, which is where we find it today. This is what we got from the Fed’s statement after the Federal Open Market Committee (FOMC) meeting on Wednesday as well as from the press conference given by the Fed Chairman, Jerome Powell. The pendulum has shifted so much that it is purposefully disregarding the better news on inflation we have gotten over the last several months and ... (full story)