Last week I fought a lonely fight here, arguing that the Fed needed to lower its targeted Funds rate while reassuring people that it hasn’t given up the LONG-TERM fight against inflation. Events that bean the day after I first started making the argument have borne out my case exactly, about how the Fed REALLY needed to do something to ward off a panic that I sense was coming. Now the panic has demonstrably arrived….and the great Larry Kudlow explains the proper response, exactly what I was trying to say, but far, far better than I said it. Inject money into the economy and let the Funds rate float (which in this case would mean letting it drop).
