Attention Economy


Wednesday, June 12, 2019

Fed Rate Cut Debate

The market believes the Fed will cut rates by September. Should it?

The Disconnect between Inflation and Employment in the New Normal by Governor Lael Brainard

Is Low Inflation a Problem for the United States?
Esther L. George, President and Chief Executive Officer Federal Reserve Bank of Kansas City 
“As long as inflation was below its objective and unemployment was above its longer-run level, it was appropriate to run an accommodative policy to promote the movement of both variables back toward their longer-run sustainable levels. Accommodative policies tend to lower unemployment and, generally speaking, increase inflation.
But with the unemployment rate now below its longer-run level, should we still be concerned about inflation running slightly below target? As I listen to business and community leaders around my region, I hear few complaints about inflation being too low. In fact, I am more likely to hear disbelief when I mention that inflation is as low as measured in a number of key sectors.”