The Fed’s Yield-Curve Problem – WSJ

For some forecasters, the inversion of the yield curve has been a sure sign a recession is coming. For the Federal Reserve, it could turn into a different kind of problem.

Fed policy makers on Wednesday left their target on overnight rates at a range of 5.25% to 5.5%, holding it at its highest level in more than 20 years. But a dovish postmeeting statement that acknowledged inflation’s cooling trend—and policy maker forecasts of lower rates by the end of next year—suggested easing might be coming sooner rather than later.