As the next Federal Reserve meeting approaches, many are waiting in anticipation to learn how the Federal Reserve is going to approach the federal funds rate, particularly as we get into the fall. If cut, lower interest rates are expected to have seismic ripple effects on the rest of the economy, potentially boosting stock prices and kicking the housing market into a frenzy.
For one economist, a rate cut couldn't come soon enough — and it might even be overdue, he argues, based on how the Fed looks at inflation to make decisions. Mark Zandi, chief economist at Moody's Analytics, says the Federal Reserve uses a flawed benchmark to analyze inflation trends, which could affect how the department decides whether or not to cut rates.
