4 ms·

Unemployment is looking okay, but inflation is non-existent and Industrial Utilization is still below "normal". Why should rates be raised? For some reason pe

• throwaway1967 11y ago
  You forgot the sarcasm tag.
• onion2k 11y ago
  People are concerned that very low interest rates for the long term will lead to an asset bubble[1]. It's a reasonable concern; it's happened in the past eg the 1980s Japanese real estate bubble[2]. [1] https://en.m.wikipedia.org/wiki/Economic_bubble#Identifying_asset_bubbles https://en.m.wikipedia.org/wiki/Economic_bubble#Identifying_... [2] https://en.m.wikipedia.org/wiki/Japanese_asset_price_bubble https://en.m.wikipedia.org/wiki/Japanese_asset_price_bubble
  • forgetsusername 11y ago
    >"People are concerned that very low interest rates for the long term will lead to an asset bubble[1] If people foresee the bubble, why do they participate in it? Why aren't the on the "short" side? I get bubble mechanics. What I don't agree with are forecasts like, "What about asset bubbles?" Well, what about the income gap from years of sub-optimal growth happening right now? Why does an asset bubble (which have occurred throughout history, regardless of rates) trump that scenario? The idea of damaging growth now to forestall a possible asset bubble in the future is not a good tradeoff.
    • Rmilb 11y ago
      >If people foresee the bubble, why do they participate in it? Why aren't the on the "short" side? From John Maynard Keynes himself, "The market can stay irrational longer than you can stay solvent.”