Running Up That Hill The Federal Reserve raised its benchmark federal funds rate by 0.75% (3 times the usual 0.25% notch) on June 15, putting the policy rate in the range of 1.50-1.75%. This marks the most aggressive step taken so far to fight inflation. During the press conference following the rate decision, Fed Chair Jay Powell pointed out that the Fed is “not trying to induce a recession”, but “that the environment has become more difficult, clearly, in the last four or five months”. A second 75 bps hike was kept on the table for July, but with the qualification that such large moves are unusual and that the Fed remains “data dependent”.  Source: New York Times As we mentioned last week, the effectiveness of Fed’s policy should be measured by core inflation (through demand moderation) rather than headline inflation (the higher and more volatile figure that...