Rocky financial markets are just the latest reason the Federal Reserve should hold off on raising interest rates at its meeting this week.
This is a significant factor the Federal Reserve draws on when deciding whether to raise, lower, or maintain interest rates.
The diminished wealth effect is just one of several reasons why the Federal Reserve should not raise rates this week.
Rising interest rates threaten this climate because they increase the cost of starting businesses, which drives economic and labor market growth.
Rather than putting the brakes on this long overdue growth by continuing to raise interest rates, the Federal Reserve should give the economy some more room to run.
Federal Reserve Chairman Jerome Powell offered Americans hope that the central bank may hold off on raising rates when he announced last month that rates "Remain just below" the neutral target, neither accelerating nor impeding growth of the economy.
What most observers fail to recognize is that interest rates may actually already be at neutral considering that the Federal Reserve is offloading the $4.5 trillion balance sheet it acquired following the Great Recession.
https://thehill.com/opinion/finance/421623-federal-reserve-must-not-raise-interest-rates-for-good-reasons
This is a significant factor the Federal Reserve draws on when deciding whether to raise, lower, or maintain interest rates.
The diminished wealth effect is just one of several reasons why the Federal Reserve should not raise rates this week.
Rising interest rates threaten this climate because they increase the cost of starting businesses, which drives economic and labor market growth.
Rather than putting the brakes on this long overdue growth by continuing to raise interest rates, the Federal Reserve should give the economy some more room to run.
Federal Reserve Chairman Jerome Powell offered Americans hope that the central bank may hold off on raising rates when he announced last month that rates "Remain just below" the neutral target, neither accelerating nor impeding growth of the economy.
What most observers fail to recognize is that interest rates may actually already be at neutral considering that the Federal Reserve is offloading the $4.5 trillion balance sheet it acquired following the Great Recession.
https://thehill.com/opinion/finance/421623-federal-reserve-must-not-raise-interest-rates-for-good-reasons
No comments:
Post a Comment