In unison, it seemed, we all took a step closer. The campfire reduced to smoldering embers. We stared into the campfire as if there was some far away place we wanted to be. Earlier that evening the flames were roaring. The kind of fire that made you take a step back, the heat so intense. Now, still warm if you were close enough. Still dangerous, embers capable of starting another blaze.
Hopefully, we can all remember a time we were this close to a campfire in the great outdoors. The interesting thing about this late stage of a fire, is that although still dangerous, most of the danger has subsided. That does not indicate attention can be eliminated. One must see the embers to their end. Often, one douses the remains with water to extinguish any possible threats.
The Federal Reserve is in a similar stage with the US economy and inflation. Inflation is trending lower. The flame that was ignited by massive global stimulus is being reduced to embers. It is not time to relax. The flame no longer roars. The embers still dangerous. Time will tell if more water is needed. For now, enough has been done. Patience.
The last campfire is becoming a too distant memory. I love to make Smores by the dying embers. I prefer lightly toasted marshmallow, just warm enough to melt the chocolate. Some like it burnt, requiring incineration. Maybe they are impatient for the tasty treat? My preference, patience for my version of the quintessential treat.
My message to Federal Reserve, patience for the best result. Let’s see what the current rate increases produce, before they choose to douse the fire again.