Economists haven’t been this critical of Fed tightening since 2010

Economists are beginning to think that Federal Reserve of the United States is tightening monetary policy too much.

That is the conclusion of the results of a survey by the National Association for Business Economics (NABEfor its acronym in English) published on Monday, which showed that 21% of respondents consider the current monetary policy stance of the US central bank to be “too restrictive”, the largest proportion since mid-2010.

The results, published before the annual economic policy conference of the NABE taking place this week in Washington, were collected between January 23 and 30, just before the most recent monetary policy meeting of the Fed on January 30 and 31.

Fed officials raised their benchmark interest rate by more than five percentage points between March 2022 and July last year, in the fastest tightening cycle since the early 1980s. Inflation slowed rapidly in the second half of 2023, raising expectations in financial markets that the central bank would begin cutting rates in early 2024.

At the January meeting, the president of the FedJerome Powell and his colleagues voted to leave the benchmark rate unchanged, noting that the upcoming March meeting is unlikely to be a starting point for rate cuts. Currently, investors are betting that the easing will begin in May.

Powell cited strong economic growth and a strong labor market as reasons why the Fed You could take your time before you start undoing the adjustment measures. A monthly jobs report released on Feb. 2 showed job creation was much higher than expected for the start of the year, while job growth in 2023 was also revised upward.