| The economy has plenty of problems, both home-grown and imported from a volatile geopolitical situation, Axios' Neil Irwin writes. - But wherever the leaders of the Federal Reserve look right now, they're seeing flashing green lights that the world wants them to get moving on raising interest rates.
Why it matters: Yes, the Fed acts independently based on its best analysis of economic data. But other factors inevitably shape the tone of internal debates — for instance, discussions by outside economic thinkers, and financial market reactions to Fed moves. - Right now, those are almost uniformly pointing toward more aggressive action to try to rein in inflation.
Driving the news: At noon today, chair Jerome Powell is scheduled to address the National Association for Business Economics. He'll face a room full of people who think the Fed's policy is too loose — 77% of them, versus 22% who think it's about right, according to NABE's latest biannual Economic Policy Survey, released this morning. - The group consists of economists working in industry who tend to have a more practical, on-the-ground view of business conditions than their academic counterparts. This is the highest share to hold that view since the question has been asked, dating to 1995.
- Also, 78% of the respondents thought it "likely" or "very likely" that inflation will remain above 3% next year, a bad sign for how embedded inflationary pressures are becoming.
But it's not just business economists sending the Fed the all-clear sign on a move toward tighter money. Markets' adjustment to the beginning of the interest rate-hiking campaign has been relatively orderly, especially given the disorder emerging from Eastern Europe. - Powell on Wednesday sent the message the central bank is likely to raise interest rates significantly over the next couple of years and begin shrinking its balance sheet. But the markets did not display the negative reactions they had in some past episodes when the Fed announced more aggressive tightening plans.
- Longer-term bond yields were stable to up slightly last week — in contrast, for example, to December 2018 when yields fell steeply, a sign that the Fed's rate hike plans were a mistake and would lead to lower growth. The stock market went on a tear following last week's meeting, rather than plunging like in past episodes.
It's true in the political sphere as well. - President Biden has said repeatedly that he trusts the Fed to take necessary action to bring down inflation, which suggests there will be no pushback from the administration to the rate hike campaign.
The bottom line: None of this means that an aggressive rate-raising campaign will be painless, or even that it's the correct policy path. It does mean that Powell and his colleagues have more external pressure to speed up than to slow down. | 
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