Monetary policy rules show the Federal Reserve may be well behind the curve in its effort to cool inflation.
A report this week from the Federal Reserve Bank of Cleveland said that, based on a mix of simple monetary policy rules, the median view of the federal-funds rate suggests it should be at 3.23% right now, not at the near-zero level it has been at since March 2020. Under those rules, the rate would rise to 3.72% by the first quarter of next year and to 3.95% by the first quarter of 2024, the Cleveland Fed said.
The...
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