Leader_Fed shows due caution about future tightening

By Editorial

What with trade wars, big tax cuts and intense political uncertainty, there are few parts of US policymaking at the moment, particularly on the economic front, which have earned the distinction of being boring. It is perhaps a tribute to the Federal Reserve, where Jay Powell has now been chairman for nearly eight months, that monetary policy is the closest to achieving that particular accolade. On Wednesday, to almost no one’s surprise, the central bank lifted the benchmark rate a quarter point to a range of 2-2.25 per cent, the eighth such increase since it started to raise borrowing costs in 2015.
Certainly compared with the wrong-headed policy elsewhere in Washington, the move was not a ludicrous one. The US economy has been growing rapidly, and the threat of deflation has considerably receded. Yet there is still an obvious missing piece of the recovery equation, a rise in real wages — a remarkable non-appearance act given the length of the expansion.