"Lowering rates does not sacrifice long term growth. Rates were drastically lowered in 91 and 82 (83?) as well, and that didn't exactly negatively impact long t

"Lowering rates does not sacrifice long term growth. Rates were drastically lowered in 91 and 82 (83?) as well, and that didn't exactly negatively impact long term growth." The federal funds rate controls indirectly the inflation so if you had them very high (which hurts the economy a lot but you have to do it if you want to lower the inflation) of course you can lower it back to normal (around 5%) when inflation is back to normal (around 2%). But lowering it below the normal rate increases exponentially the yearly inflation gain because banks borrow from the FED and using fractional-reserve banking they flood the market with new money, lowering the value of the dollar. Meaning that "typically a person's most valuable asset (home)" increases in price, and decreases in value. The purchasing power of the people goes down, together with the GDP. The dollars becomes internationally unattractive (I'm looking at China's Reserve Bank for example, or just having dollars) as its annual inflation rate makes any saving to lose value. One dollar will buy $1 worth of goods and services this year, but only 95c the next year with an inflation at 5%; this has the same effect as a 5% annual tax on cash holdings.