Central Banks
Three Hidden Words From Fed Insiders Point to Much Higher Rates
- Staff say potential output ‘revised down significantly’
- Revisions suggest economy was running hotter than estimated
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The Federal Reserve’s influential staff judges that under the surface the US economy is running even hotter than they thought, helping to explain why inflation remains at a 40-year high and providing reason to expect even more interest-rate hikes.
Tucked within 12 dense pages describing the Fed’s September policy meeting last week was a statement concerning a seemingly innocuous yet vital estimate that the staff use as a building block for internal economic forecasts.