Recently, a reporter buddy of mine in Birmingham asked me for a quote about the Fed’s recent rate hike. Did I think it adequate? Was it premature or overdue? That sort of thing. I have known him for long years, and know he is typically looking for a quick soundbite. Of course, funny is always nice.
I pretty much gave him what we have been telling clients for the better part of a year now. The Fed wants to normalize the yield curve, but not invert it. The national data has been strong enough to support a higher overnight lending target for quite a while. This past rate hike, plus the next two, really aren’t data dependent. Finally, Fed Chairman Janet Yellen wants to do what she can before Trump fails to reappoint her at the beginning of next year. That sort of thing.
No, it wasn’t funny, but monetary policy normally isn’t hilarious. (Read the full article as previously published in the Montgomery Advertiser on March 20th, 2017)