In September, despite the market’s speculating that the Fed might raise interest rates, the Fed decided to leave rates unchanged, postponing a rate hike.
Despite our guess, it also did not particularly emphasize its intention to raise rates within the year, even though there is an obvious difference of recognition between the Fed and investors in expecting how fast the Fed is going to raise rates in the next few years.
Is the Fed intentionally leaving the gap as it is? If the answer is yes, and there is some hidden strategy behind the Fed’s attitude, it might imply what the Fed truly wants to do, and it is neither about the labour market nor the inflation. It is something else.