Life In The Fast Lane

The Fed’s monetary decisions are only as good as the data they’re dependent on. But economic data can be misleading for several reasons. What looks recessionary may simply be a temporary anomaly that gets revised away or followed by strong data the next month. Today, Dr. Ed makes the case that the Fed’s September decision to cut the federal funds rate by 50 basis points was too much, too soon, as subsequent data have shown. If so, inflation could halt its moderating trend and stock market valuations could inflate unduly in a meltup scenario. …  Also: The Fed’s estimate of the “neutral” federal funds rate is probably too low. … And: Dr Ed reviews “Lee” (+ +).