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Why the US Federal Reserve’s Options Are Limited

The US Federal Reserve's Federal Open Market Committee ought to announce a rate increase that is large enough to bring its policy rate to an optimal neutral-plus level. But it has an even greater interest in adhering to its own forward guidance, implying that it will probably maintain its incremental approach.

BERKELEY – What policy will the US Federal Reserve announce after the Federal Open Market Committee’s two-day meeting this week, and what policy should it announce?

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