Is the economy slowing enough for the Fed?
The Federal Reserve (Fed) wants the pace of economic growth to slow to help bring inflation under control. Economic growth has been slowing since early 2021, back when there was a great deal of stimulus (fiscal and monetary) in the economy to battle the economic impact of the pandemic. Since then, much of the emergency fiscal stimulus has stopped. In addition, the Fed has taken away the monetary stimulus by raising the federal funds rate by 500 basis points and allowing bonds to mature out of its portfolio (quantitative tightening). More recently, banks have become more stringent in their access to credit.