The Formula for Fed Action

Chart of the Week: The Formula for Fed Action

Director of Research Jeff DeMaso By Director of Research Jeff DeMaso

It really shouldn’t be a surprise that the Federal Reserve is gearing up to raise the fed funds rate. The central bank has a dual mandate of price stability and full employment. With consumer prices having risen 7% in 2021 and the unemployment rate clocking in below 4% the Fed is now turning its sights on price stability. Policymakers’ escalated inflation-fighting timeline now calls for a rate hike as soon as this March. This graphic says it all.

Formula for Fed Action
Source: Adviser Investments.

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