Raskin isn't a pro-regulation zealot, but still she can't be confirmed
What you're not hearing about the coming Fed tightening cycle
Friday, February 18, 2022
Imagine if you will: no inflation, but March lift-off still makes perfect sense.
Update to Strategic View
Powell's Senate confirmation is being held hostage to Raskin's, and the political atmospherics center on inflation-fighting. Powell will come to the March FOMC as only chair pro-tem, and needing to sound especially hawkish. But even if inflation were already back to the 2% target, the funds rate should not be zero. Based on standard models, even assuming only 2% inflation, the funds rate should be 2.57%. With the curve expecting a 2% terminal funds rate for this cycle, it's hard to see any cause for panic about lift-off in March and further hikes this year.