The Fed has to do the right thing and not worry about politics: Fmr. Minneapolis Fed president

The two-day Federal Open Market Committee (FOMC) meeting has concluded, with the Federal Reserve voting to hold interest rates steady within the 5.25% to 5.50% range. Joining Market Domination to dissect this decision is former President and CEO of the Federal Reserve Bank of Minneapolis Gary Stern. Stern asserts that there was no surprise in the Fed's announcement, highlighting that the outcome aligned with market expectations.
Stern notes that the Fed "gave itself too much credit" for the deceleration in inflation. While the central bank attributed this trend to monetary policy, Stern argues that the deceleration was linked to "the continued unwinding" of factors that had previously "disrupted" the economy, such as the lingering effects of the COVID-19 pandemic.
Addressing the path ahead, Stern suggests that the fight to bring inflation down to the 2% target will "take some time," though it can still be met. Stern acknowledges that the United States has "a big, complex, sophisticated economy," and although the Fed may express its desires, economic behavior may not change overnight to support it. He emphasizes the need for patience, stating, "The Fed shouldn't kid itself just because it'd like to get to 2% it's gonna get there smoothly," and instead start to question whether they have done enough.
When asked about the potential impact of the upcoming election on Fed officials' decision making, Stern states: "It's actually quite simple. What the Fed has to do is the right thing, whatever it may be."

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