The quiet tightening provides a case for cutting rates sooner, even if the latest inflation report is not enough to convince central bank leaders that inflation is returning to target.
The reason to be tightening in real terms would be if you thought the economy was overheating. This is not, in my view, what an overheating economy looks like.
The risk of lowering rates too late and weakening the economy is just as large as cutting too soon and pushing inflation back up, Fed chair Jerome Powell told lawmakers this week.
If we're going to stay as restrictive as this - and in fact be, in real terms, tightening - we have to be pretty mindful of both sides of the mandate. It's not going to just be inflation.
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