Behind the Curtain: The FOMC Meeting in Review May 2023

During every spell of sustained tightening by the Federal Reserve (Fed), we learn something about some institution’s balance sheet. After the fact, we should not be distracted by individual circumstances and focus on the broader messages. Economic activity remains vigorous and above trend, putting additional pressure on already taut resource markets, and some prices have more adjusting to do. Financial strains add uncertainty around an unchanged base view.

With this tightening cycle closer to the end than the beginning, we debate the risks—recession, debt ceiling and otherwise.