The First Fed Tightening Probably Will Not Be Soon

In my November UCLA Economic Letter, I consider when the Fed may increase the federal funds rate.

As was widely expected, the Federal Open Market Committee (FOMC) recently announced the end of its current round of asset purchases, which began two years ago and left the Fed holding $4 trillion in Treasuries and mortgage-backed securities. With this decision, the first item on the Fed's list of steps to normalize monetary policy has been crossed off. The next item on the list is the initial increase in the federal funds rate from its current level near zero. Read more...