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Kashkari: Policy Has Tightened a Lot. Is It Enough? (A Second Update)
On May 6, 2022, I first published an essay explaining why I focus on long-term real rates to evaluate the overall stance of monetary policy, which includes effects from both the setting of the federal funds rate and changes to the Federal Reserve’s balance sheet. Please see that essay for a discussion of why long-term real rates drive economic activity rather than short rates or nominal rates. On June 17, 2022, I then published an update to reflect both increases in inflation and actions by the Federal Open Market Committee (FOMC) to tighten policy in response. This essay is an update to those earlier versions in ... (full story)
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FED'S KASHKARI: I PUT A 60% PCT PROBABILITY ON A SOFT LANDING
— *Walter Bloomberg (@DeItaone) September 26, 2023
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KASHKARI: I PUT A 40% PROBABILITY ON A SCENARIO WHERE FED WILL HAVE TO RAISE RATES SIGNIFICANTLY HIGHER TO BEAT INFLATION
— *Walter Bloomberg (@DeItaone) September 26, 2023