In a statement explaining her dissent to Fed’s 75bps rate hike this week, Kansas City Fed President Esther George said, “I viewed that move as adding to policy uncertainty simultaneous with the start of balance sheet runoff.”
“The speed with which we adjust the policy rate is important,” she explained. “Policy changes affect the economy with a lag, and significant and abrupt changes can be unsettling to households and small businesses as they make necessary adjustments. It also has implications for the yield curve and traditional bank lending models, such as those prevalent among community banks.”
