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If the Fed is already often failing to achieve their target inflation rate, wouldn't raising interest rates cause them to undershoot it even further and lower i
by throwaway34241 7y ago
If the Fed is already often failing to achieve their target inflation rate, wouldn't raising interest rates cause them to undershoot it even further and lower investment / set off a recession?
I think their point is that while it's arguable that rates are too low, congress needs to change fiscal policy for them to be able to raise rates, so it's unfair for the Fed to get all the blame here. They're using the policy tool they have to execute their mandate and the other (maybe better) policy tools are out of their hands.
- toomuchtodo 7y agoCorrect. These are fiscal policy problems, not monetary. The Fed is helpless with the tools they have while Congress needs to act.