Yield-Curve Is a Problem for the Fed: Central Bank Might Ease Rates Sooner Rather Than Later

Chairman Jerome Powell’s Federal Reserve has decided to maintain its target interest rate range at 5.25% to 5.5%, the highest level in over two decades. Despite this, the Fed’s post-meeting statement, acknowledging the recent slowdown in inflation, coupled with forecasts from policymakers projecting lower rates by the end of the following year, suggests that the Fed might be considering easing monetary policy sooner rather than later. This decision comes amid concerns about an inverted yield curve, often seen as a precursor to a recession.