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Is the Punch Bowl Empty?
In October 1955, Federal Reserve Chair Bill Martin made perhaps the most famous analogy about the role of the agency, likening it to a “chaperone who has ordered the punch bowl removed just when the party was really warming up.” The line actually came from someone else – he says as much in the speech – which focused on inflation and the regulator’s mandate to promote maximum employment, stable prices and moderate long-term interest rates. The federal funds rate was 2.24% at that time, higher than the U.S. has seen following more than a decade of predominantly how-low-can-you-go interest rates.…
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