In Undoing One Epic Mistake, Is The Fed Making Another?

Monetary Policy: The Fed’s decision to hike its benchmark funds rate a quarter-point to a range of 1%-1.25% has been styled as a “normalization” of Fed policy. Maybe so. But it’s also a tacit admission that its past policies were a mistake.
We say this because the Fed held interest rates steady at an unprecedented low rate of 0% for nearly eight years.
Yet, during that time, the economy never grew over 3% for a year and inflation stayed below the Fed’s target of 2% a year, even as unemployment fell to a current 4.3% — which in the Fed’s eyes equals “full employment.”
On the surface, at least from the standpoint of inflation and unemployment, it looks like a success.
But it isn’t. To give itself some maneuvering room, the Fed should have raised rates long ago when the economy’s trajectory was clearly upward — 2013 comes to mind.
Now, with the economy looking a

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