Fed Faces First Test Under Warsh: Will Interest Rates Rise in September?

The Federal Reserve's upcoming rate-setting meeting in September offers an opportunity for the Fed to correct course and move policy back towards a more disciplined, rules-guided approach.

According to the Monetary Rules Report from AIER's Sound Money Project, interest rates are currently too low. The report suggests that the appropriate federal funds rate is somewhere between 3.79 and 6.02 percent.

This aligns with the monetary rules, which have consistently indicated over the past few months that policy needs to become more restrictive.