The Fed made its first mistake in 2021. It misread a supply shock as a transitory blip, fell behind, and spent two years engineering the steepest tightening campaign since Paul Volcker's early-1980s crackdown. Now, with April CPI at 3.8%, producer prices up 6.0% year over year, and fed funds futures pricing a meaningful chance of a rate hike before year-end, there is a real risk the institution overcorrects in the opposite direction and makes the second mistake to go with the first.
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