Fed Officials Worry Conditions Aren't Tight Enough as Yields Fall

Dow Jones
08/20

1529 ET - In July's Fed meeting, "some participants commented that financial conditions might not currently be sufficiently restrictive to facilitate a return of inflation to 2 percent." Today's moves in yields---such as lower long-end yields, tighter term-premia and a weaker dollar---only eases financial conditions further, said Matthew Luzzetti, chief U.S. economist at Deutsche Bank. For those officials, "That gives them potentially another reason to think about a need for policy tightening," Luzzetti said.

 

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