You have lots of good points. The thrust of my argument is that it does not make sense to have paused last Wednesday only to hike in late-July. What is the purpose of delaying by 6 weeks?
I disagree. It is true that the FED is unforgivable for letting inflation expectations build up in the economy but the decision to stop from a pure risk management perspective is warranted. What should they do? Keep hiking till they see the economy tank? At that stage major cuts will be needed. We are all aware of the lags that monetary policy take to dent the economy so a pause is not a disaster. The ECB is in a worse situation because most of the cuts were simply make up as QE was not stopped right away.
You have lots of good points. The thrust of my argument is that it does not make sense to have paused last Wednesday only to hike in late-July. What is the purpose of delaying by 6 weeks?
I disagree. It is true that the FED is unforgivable for letting inflation expectations build up in the economy but the decision to stop from a pure risk management perspective is warranted. What should they do? Keep hiking till they see the economy tank? At that stage major cuts will be needed. We are all aware of the lags that monetary policy take to dent the economy so a pause is not a disaster. The ECB is in a worse situation because most of the cuts were simply make up as QE was not stopped right away.