Must-Read: Liz McCormick: Memo to Bond Market From Fed: You Were Right on Interest Rates
Must-Read: Mark me down as one of those people who never understood what the Federal Reserve saw in the data or the forecast to make an end-of-2016 short-term safe nominal interest rate of 3%/year appropriate in the first place. It seemed to me to indicate a dangerous degree of unrealistic groupthink around the FOMC table and among the senior staff. It now strongly looks as though by the end of 2016 the Federal Reserve will have undershot all three of its inflation, its growth, and its employment targets for nine straight years:
: Memo to Bond Market From Fed: You Were Right on Interest Rates: “Federal Reserve policymakers are coming around to the bond market’s wisdom…
…about where interest rates are headed…. For the second time this year, the Fed’s policymakers lowered their rate projections in official forecasts released Wednesday. ‘The Fed is giving you expectations, and the market is giving you reality,’ said Todd Colvin…. Fed officials… [are] moving closer to the level indicated by federal funds futures…