The Fed tightens and then is surprised with the outcome!
SAO PAULO | By Marcus Nunes via Historinhas | For the last 16 months the Fed has been on “tightening mode”. This is very clearly reflected in the chart for inflation expectations above. When Bernanke started the “taper talk” in May 13 inflation expectations came down and stayed down. Following the June 14 FOMC meeting, dedicated to discussions of “policy normalization” inflation expectations dived! How can they be surprised with the consequences.