Fed Thoughts

Fed Thoughts: The Long and Short of Policy Choice

Fed Thoughts White Paper
March 2023

Authors & Contributors

With only a fraction of the consumer-price basket seeing prices normalize, an end to the run of good news on inflation and blockbuster gains in employment, it is harder to justify the Fed’s stepdown to the pace of tightening.

Chief Economist and Macro Strategist Vincent Reinhart outlines why we should be worried about the sticky majority of the consumer-price basket.

The crowded calendar of economic data in this intermeeting period importantly shapes the actions and words of the Federal Open Market Committee (FOMC) at its upcoming meeting on March 21 to 22. Thus far, they have mostly confirmed that the good news on disinflation has run its course and aggregate demand retains considerable above-trend momentum. The Fed has more work to do.