Analysis of Central Bank Policies and Economic Implications

The Federal Reserve is not expected to end its policy error today, but hopefully a rate cut will be signaled for September. Monetary policy has progressively tightened since the start of last year. For savers, slowing price inflation has increased real interest rates. For borrowers, slowing household income growth has increased real interest rates. The pressure of real policy has become ever more onerous as the economy has slowed.