Never bet against the Fed. That’s the advice many in the US are giving at the moment. It forms part of their core argument that the US cannot be heading into recession, because the Federal Reserve, and especially its chairman, Alan Greenspan, is on the case.
Using the last eight years as a guide, that might seem reasonable. The Fed’s monetary policy, as well as Greenspan’s influence on the early years of Clinton’s fiscal policy – he told Clinton to increase taxes or he would increase interest rates – helped turn a period of recovery from recession into one of the most prosperous phases of the country’s history.
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