TsLombard with the note.
The Fed, no longer chasing, is back where it was before inflation became transitory – waiting to see whether inflation picks up in response to growth or continues its trek back to 2%. At this moment, with the 5.5% funds rate on its mark with the Taylor rule, and inflation generally decelerating, however slowly, the Fed has communicated it can wait and wait it will.
Assume for the moment no recession in 2024 (not my call, but what if) and inflation is stable in a 3% to 4% range — would the Fed hike to push inflation to 2% during an election year?
