Two Fed Presidents Signal Caution on Rate Hikes, But Not Until the Damage is Done – Mish Talk

A Meaningless Caution

The Wall Street Journal reports Two Fed Officials Make Case for Caution With Future Interest Rate Raises

OK, but look at their rationale and the timeframe, emphasis mine.

Fed Vice Chairwoman Lael Brainard noted how previous rate increases, together with anticipated further rate increases, will slow the economy in ways that can’t be observed yet during a speech Monday at a conference of business economists in Chicago.

“It will take time for the cumulative effect of tighter monetary policy to work through the economy and to bring inflation down,” she said. “The moderation in demand due to monetary-policy tightening is only partly realized so far.”

Earlier Monday, Chicago Fed President Charles Evans said under his current outlook for the economy, it would be appropriate for the central bank to pause rate increases at slightly more than 4.5% by next March and then to assess how the economy was reacting.