Lowering the unemployment rate threshold would appear to be a neat way for the Fed to commit to leaving interest rates at near-zero for longer and perhaps offset any tightening in financial conditions from a decision to taper QE3. But this could do more harm than good as there’s a risk that the markets will stop believing the Fed’s forecasts.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.