Surveillance: Central Bank Roundup with Posen
Bloomberg Surveillance
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The Importance of Tight Policy in the US Economy
We are just now getting to positive real interest rates. To me, we are only now getting to tight policy. Especially since the residential construction and employment proved very resilient to interest rate rises in a way that we have not seen before. It tells us that the amount of monetary tightening has been done so far is insufficient. Now maybe what we're just now gotten over the last couple of months will prove sufficient. But I'd rather err on the side of tightening more and that the US economy won't fall into recession.
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