With a few carefully chosen words, Federal Reserve Chairman Kevin Warsh both explained this week's decision to hike interest rates and raised vexing questions about what comes next. Warsh described Wednesday's decision to lift the central bank's benchmark rate by a quarter percentage point not specifically as a tightening of policy but rather as removing "a dose of accommodation." Further, he explained that the move was possible because of a U.S. economy that appears to have "strengthened" and financial conditions that have become less restrictive.
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