Bloomberg Surveillance · Tuesday, September 8, 2026
The modern approach to monetary policy involves reaching a desired restrictive level and maintaining it for an extended period, rather than aggressively hiking rates until something breaks. This strategy aims to cool the economy without causing a severe recession.
“The old way of doing things was you just jacked up rates until you broke something, right? And then eventually you'd have a recession and then they would come down and it was just.”
“The more modern monetary policy received wisdom is you get to where you want to be relative to neutral and then you just stay there for as long as it takes.”
“And the Fed wants to be modestly restrictive.”