Greenspan’s Parting Shot
In its last meeting with Alan Greenspan at the helm, the FOMC decided today to raise interest rates (i.e. the Federal Funds rate) yet again. See Mark Thoma for analysis of the accompanying statement.
Despite David Altig‘s response to my worry that the Fed might overshoot (I think David and I differ more in our assessment of inflation risk than in our analysis of what happened in 1995 – inflation probably seems to be a less pressing problem right now for me than for him) I remain concerned that monetary policy may be becoming too tight for a slowing economy with stable inflation.
UPDATE: Parenthetical remark amended upon reflection.