Obama-Era CEA President Says Federal Reserve Mostly Out Of Forward Guidance: 'Lower Threshold To Raise Rates At The Next Meetings'

In a recent tweet, Jason Furman, a prominent economist and former Chairman of the Council of Economic Advisers during President Barack Obama‘s term, shared his insights on the Federal Reserve’s latest decision to raise interest rates.

What Happened: Furman quoting a Wall Street Journal reporter’s tweet, suggested that the Federal Reserve has a lower threshold for raising rates in the upcoming meetings than for cutting them.

Nick Timiraos, the chief economic correspondent at the WSJ, tweeted about current Fed chief Jerome Powell‘s decision to “get out of the forward guidance business” while controlling inflation.

“The Fed is mostly out of the forward guidance business but not entirely out of it. They have a much lower threshold to raise rates at the next meetings than they do to cut them. Powell put a lot of emphasis on forward guidance about not cutting this year but not the opposite,” Furman said in response, pointing out that the Fed is mostly out of the forward guidance business, but not entirely.

See Also: Fed Raises Interest Rates To 5.5%, The Highest Since Early 2001

Why It Matters: Furman’s analysis provides a unique perspective on the Federal Reserve’s recent actions and potential future decisions. His comments come in the wake of the Federal Reserve’s decision to raise interest rates, which has been met with mixed reactions from economists and market watchers.

As widely anticipated Wednesday, the Federal Reserve raised the federal funds rate by 0.25% to 5.25%-5.5%, pushing borrowing costs to their highest level since February 2001.

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Image by Gerald R. Ford School Of Public Policy on Flickr