- February 1, 2022
- Posted by: Stratford Team
- Category: Economy
Federal Reserve officials are preparing to pull back their economic help as inflation remains stubbornly high and the labor market swiftly heals, and they are signaling clearly that the last business cycle is a poor template for what comes next.
During the economic expansion that stretched from the global financial crisis to the start of the pandemic, the Fed acted very gradually — it slowly dialed back bond buying meant to help the economy, then only ploddingly shrank its balance sheet of asset holdings. Central bankers increased borrowing costs sporadically between 2015 and the end of 2018, raising them at every other meeting at the very fastest.
But inflation was muted, the labor market was slowly crawling out of an abyss, and business conditions needed the Fed’s support. This time is different, a series of Fed presidents emphasized on Monday — suggesting that the pullback in policy support is likely to be quicker and more decisive.
Four of the…
