THE FED: NOW THE NAVIGATING GETS REALLY TOUGH

摘要

The Federal Reserve's efforts to balance growth and inflation are reaching a critical juncture. The worst fears about U.S. economic growth in 2008 are subsiding. The financial markets are still fragile but functioning better, and chances of a serious recession, or any recession, are diminishing. Now the Fed is setting its sights on inflation, which could play a big role in the outlook for growth in 2009. Lifting interest rates later this year to fight inflation would risk extending the housing slump and therncredit crunch, and it would lessen the chances for a solid recovery.rnHow much growth the Fed is willing to sacrifice next year by raising rates will depend on the seriousness of the inflation threat. Economists are sharply divided over whether the Fed will-or even should-lift rates to keep prices down. Many believe the weak economy will prevent soaring energy and food costs from fueling inflation more broadly.