Should The Fed Raise Rates?

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For sev­en years now, the rate The Fed sets to deter­mine the price banks pay to bor­row from it and from each oth­er has been zero, or so close to zero that the dif­fer­ence is imma­te­r­i­al. This is, his­tor­i­cal­ly speak­ing, not nor­mal, and The Fed has a des­per­ate desire to return to what is nor­mal, which is rate a few per cent above the rate of infla­tion (see Fig­ure 1).

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.