The FT says the Federal Reserve appears to be 'cornered'

Author: Eamonn Sheridan | Category: Central Banks

An opinion piece in Monday's Financial Times on the US Federal Reserve

  • two weeks ago made a mysterious U-turn
  • signalled that its hiking cycle was over for now
Not only 'mysterious', but a 'perplexing' decision
  • the various measures of US economic performance are almost universally strong
  • The US economy is in rude health - recession fears were, and are, overdone
Says the move was in response to:
  • lingering slack in the labour market
  • a capitulation to markets
And, the risks are significant
  • US corporate debt has reached record highs
  • there remains an inescapable fear that perhaps the Fed's short-term support for an economy that was already in good health opens the door to a surge in volatility later in the year
Here is the link if you would like more (there is plenty more). FT is gated.  



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