The Fed Bets on Overshooting Its Inflation Target

The Federal Reserve concluded its March meeting on Wednesday with a widely expected 25 basis-point rate hike and a promise of more to come. The accompanying Summary of Economic Projections also signaled that the Fed expects to overshoot its inflation target. Within the context of the central bank’s framework, policy makers have little choice but to accept some overshooting of inflation. The alternative is a much costlier recession.

Continued at Bloomberg Prophets…