The Fed Is Walking a Tightrope Trying to Fight Stagflation

The big question that's been overhanging the market this week was cleared up yesterday, when the Fed announced the next upward move in interest rates -- something the stock market has been increasingly expecting over the last several weeks. In looking at the Fed's new forecasts compared to those issued three months ago, there were no material changes in the outlook for GDP, the unemployment rate, or expected inflation.

We find the Fed's action yesterday rather interesting against that backdrop, especially given its somewhat lousy track record when it comes to timing its rate increases: more often than not, the Fed tends to raise interest rates at the wrong time. This time around, however, it seems the Fed is somewhat hellbent on getting interest rates back to normalized levels from the artificially low levels they've been at for nearly a decade....733 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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