Tags: growth

Plummeting Inflation Raises New Risk for Fed: Rising Real Interest Rates

Plummeting Inflation Raises New Risk for Fed: Rising Real Interest Rates

By Nick Timiraos Federal Reserve officials start the year with a problem they would ordinarily love to have: Inflation has fallen much faster than expected. It does, nonetheless, pose a conundrum. The reason: If inflation has sustainably returned to the Fed’s 2% target, then real rates—nominal rates adjusted for inflation—have risen and might be restricting economic activity too […]

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