By David Beckworth:
The Fed’s inflation-targeting framework has forced monetary policy to be too tight for the better part of a decade.
President Donald Trump has the monetary-policy blues. The Federal Reserve’s four interest-rate hikes in 2018 apparently have him deeply worried that this tightening of monetary policy has weakened the economy. Hence in recent months, Trump has become an outspoken critic of the Fed.
The president’s instincts that something is wrong with Fed policy are actually on point, but he is just scratching the surface of a much deeper problem. The Fed’s current inflation-targeting framework has effectively forced monetary policy to be too tight not just during Trump’s presidency but for the better part of a decade.
Read more: National Review