The Fed Is Behind the Curve

Syndicated from post here.

Charles Lieberman, Bloomberg
This new view is inconsistent with the Fed’s prior position that the labor market is not tight and that meaningful room remains for additional hiring. The Fed argued for some time that there still was plenty of slack in the labor market — the central bank’s primary justification for raising interest rates only very slowly over an extended period. If the Fed really believes that there is a lot of room for incremental hiring and that inflation will remain at bay for another two years, a more stimulative fiscal policy should be welcomed, not discouraged.

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