The Federal Reserve (Fed) has been trying to slow down the U.S. economy for more than a year in order to slow down inflation. The process has, so far, been very successful, as shown by the graph below. However, economic growth has been volatile, and now it is reaccelerating once again. The latest surge in growth, to an annualized quarter over quarter rate of 4.9%, is another reminder to markets that what Fed officials have been arguing during the last year –“higher for longer”– is real. The fight to get inflation back into submission and to their long term 2.0% target is still a work in progress. We understand what ... (full story)