Does Raising The Fed Funds Rate ‘Tame’ Inflation? Is There Collateral Damage?

• “Federal Reserve officials’ concerns about stubbornly high inflation could lead them to signal that they are prepared to lift interest rates again this year…” – WSJ (June 13, 2023)
• “Fed chair [Jerome Powell] and his colleagues ‘almost overwhelmingly…think that we need to do more to get to a level of tight policy.’” – WSJ (June 29, 2023)
• “Interest rates will keep rising and stay elevated, central banks warn” – FT (June 29, 2023)

To raise, or not to raise… the Fed Funds rate –

That has been the dominant question for the Federal Reserve and for the financial markets over the past year and a half. The benchmark rate has been bumped up 500 basis points in 14 months (March 2022 – May 2023), the steepest tightening program in decades.