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The lower rates are, the less room the fed has to maneuver. What if a terrible recession happened? The fed would have their hands tied behind their back at the
by mruts 8y ago
The lower rates are, the less room the fed has to maneuver. What if a terrible recession happened? The fed would have their hands tied behind their back at the current rates.
- inetknght 8y agoDoesn't that rather imply that we haven't recovered from the last time we needed to bring interest rates low?
- kadendogthing 8y agoIt's not an implication. It's a reality. We've been propped up by credit. We've borrowed. We have to start paying it back at some point. And with debt now is better than later.
- autokad 8y agoI always hated this argument. Its sort of like saying you need to take poison, so that if you ever get sick you can stop taking poison and possibly get better. 2ndly, interest rates were not very effective in these last recessions, the common metaphor is that its like pushing rope. So maybe its better for the fed to fight recessions with QE (or something else) and leave interest rates to 'fight' inflation.