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The Fed Is Stuck Fighting the Last War

The article from The New York Times, published on December 13, 2024, discusses the Federal Reserve's ongoing efforts to manage inflation, which has been hovering above the central bank's long-term target of 2%. Despite earlier expectations of a quick return to the 2% goal, recent economic data suggests that inflation might remain stubbornly high due to factors like robust consumer spending, supply chain disruptions, and labor market tightness. The Federal Reserve, led by Chair Jerome H. Powell, is contemplating whether to maintain its current monetary policy stance or adjust interest rates to curb inflation without triggering a recession. The article highlights the Fed's cautious approach, weighing the risks of overtightening monetary policy against the dangers of allowing inflation to become entrenched. It also notes the diverse opinions among Fed officials, with some advocating for patience while others push for more aggressive action. The piece concludes by emphasizing the delicate balance the Fed must strike to achieve price stability while fostering economic growth.

Read the Full The New York Times Article at:
[ https://www.nytimes.com/2024/12/13/business/federal-reserve-inflation-target.html ]