Inflation is well below the Fed’s 2% target and barely stirring. Yet Federal Reserve officials have insisted they intend to raise interest rates later Wednesday. What gives? The answer is that the central bank’s goal with interest-rate policy is to engineer “moderately” tighter financial conditions, said Ethan Harris, global economist at Bank of America Merrill Lynch. The Fed hopes that raising the yield curve will create a modest restraint on growth, allowing the expansion to continue at a steady pace without overheating. So far, the Fed’s gradual rate hikes have failed to tighten conditions. The stock market ... (full story)