There is naturally a great deal of interest in the situation of the labor market and the Fed funds rate so I thought to look at some ND labor market measures and the funds rate.
Inflation is still a “hot button” issue and I expect I will hear about it on the radio tomorrow (well I guess today). Here are some of my thoughts on the situation right now.
The Fed provided a clear signal about increasing interest rates in the near future. I think they are late to the party and I think there is one big reason to worry about an overshoot.
In what may be the most telegraphed monetary policy move in history the Federal Reserve raised rates today by 0.25% (here is an article). The great wailing and gnashing of teeth predicted by all the Chicken Littles seems not to have come to pass though. I have been saying this on JT’s show for the better part of a year now: If the economy is so fragile that a 0.25% increase in rates is a threat to economic growth than we have bigger issues.
This is a little more macro/money than much of the stuff I post here but it seems to be something people miss sometimes. The Federal Reserve drastically lowered rates in response to the unfolding financial crisis in 2008 and later. Those rates remain low today, essentially set between 0.0 and 0.25%. Despite this range the rate is effectively staying at or below 0.1%, but that is not what I am addressing today.