Was “Move Late But Fast” þe Right Strategy for the Federal Reserve?
My view, since we started reopening the economy after the plague was that the federal reserve should be very late to raise interest rates, but that when it did start, it should raise interest rates fast. In the early stages of re-opening, the principal danger to guard against was, I thought, cooling off the economy, too soon, and landing back in secular stagnation. And the risks that an inflation spiral might begin or that rapid interest-rate increases later would land us in financial crisis seemed small, and manageable.
Question: Is it time to rethink that judgement of mine?