Fed's Future Tightening Fraught with Recession, Political Risks

Fri, January 05, 2018


“The Fed may not have the luxury of a simple monotonic
glide path back to equilibrium,” said Lou Crandall, chief
economist at Wrightson ICAP LLC in Jersey City, New Jersey.
“They’re going to have to objectively tighten monetary policy in
order to increase unemployment and stabilize inflation at their

That’s important because the central bank is more likely to
make a policy mistake and inadvertently push the economy into a
recession if it is actively seeking to curb credit and boost
joblessness, rather than just removing monetary accommodation
from the financial system, as it is now.