Risk of Fourth Summer Slump for U.S. Fed

This time, Federal Reserve policy makers are prepared for the summertime slump.

During the past three years, the Fed planned to cut accommodation early in the year only to boost it after economic growth lagged behind its forecasts. Determined not to repeat the error, the Fed will probably push on with $85 billion in monthly bond purchases through the summer, said Drew Matus, a former Federal Reserve Bank of New York economist.

“The fact they’ve been fooled multiple times by slumps in the U.S. economy means they’re going to be a little gun-shy on the exit strategy,” said Matus, deputy chief U.S. economist at UBS Securities LLC in Stamford, Connecticut.


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