he Fed is in a very difficult position. They are dealing with an economy that is facing both a negative growth shock and an inflationary shock at the same time, and are equipped only with the blunt tool of monetary policy.
The Fedspeak this week is still: wait and see, and we care most about keeping inflation under control.
This is the second post in our multi-part series on the Fed's 2025 framework review. Part 1 can be found here. The Fed has an opportunity...
The Committee is still super worried about long-term inflation expectations, and everyone from Goolsbee to Kashkari say that keeping those down is the highest priority.
Despite the tariff announcement, Fedspeak is nearly indistinguishable from last week.
