The Federal Reserve raises interest rates when economic growth exceeds potential growth and poses inflation risks, not simply when growth is high; the Fed rarely cuts off growth dramatically by raising rates during strong growth periods that lack inflation.
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Fed Rate Hikes vs. Economic Growth: A Closer Look #shortsAjouté :
What he has is this notion, and this is out there as a conservative critique, I guess, right now. Maybe it's more from the Trump side than it is the conservative side, that if growth is high, that the Fed cut raises rates.
That's not actually accurate. The Fed raises rates when it looks at growth as relative to potential and says there's a risk there of inflation, but it's really hard to find a situation where the Fed has really cut off growth too dramatically by by raising rates in the face of strong growth that wasn't accompanied by inflation.
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