The Fed Might Have Drawn Markets Into a ‘Dove Trap’

Note: Today’s Bloomberg Opinion piece is the media-friendly, market-implications version of my research note from last week, Some Thoughts on New Policy Strategies.

The Federal Reserve’s monetary policy meeting this week won’t yield any fundamental changes. The Fed’s near-term path remains holding interest rates steady and keeping its balance-sheet assets from shrinking further. But what about later in the year? We should remain open to the possibility that the Fed has pulled us into a “dove trap” and will reverse policy in a hawkish direction.

Continued at Bloomberg Opinion…