Given these differences of opinion between markets and the Fed, it would behoove the central bank to find some way to enlist the views of more market participants in its listening tour without risking another Lacker-type incident.
A recession occurs because something “breaks” the economy. Fed policy that is overly restrictive is perhaps the leading reason an economy breaks. It is the cumulative effect of overly restrictive policy week after week, month after month, that causes a recession.
The market is saying the Fed is too tight. Is the Fed listening?
This article was provided by Bloomberg News.