Fed’s Powell and Rosengren hit back at ‘fiscal crunch’ research paper

Capitol Hill in Washington DC

Unsustainable fiscal policy in the US could lead to the subjugation of the Fed's inflation target, according to a paper presented at a Monetary Policy Forum in New York on February 22.

The research drew rebuttals from a Federal Reserve governor, Jerome Powell and the president of the Federal Reserve Bank of Boston, Eric Rosengren, who concluded that it fell short on a number of fronts.

The paper* says unsustainable fiscal policy – in the extreme – will lead to a situation where the country's

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