2023, a year of pause for the Fed, so what?
9 Jan 2023
The periods of Fed pause that follow monetary tightening typically occur towards the middle or end of the cycle, at a time of economic slowdown. The point of these pauses, which are sooner or later followed by a period of monetary easing (except in 2015), is to ensure that the cycle lasts longer when a threat of recession emerges. In some instances, they did prevent a recession (1984, 1987, 1995, 1997, 2015 and 2018), in others not (1989, 2000 and 2006). That’s why the later easing period is more or less pronounced.