The editors of USA Today come out in favor of the Federal Reserve raising interest rates:
Supporters point out that the U.S. economy finally appears durable enough to withstand a bump in rates. It has added 13 million jobs since the depth of the Great Recession. The jobless rate dropped to 5.1% last month, a level considered close to full employment.
An even more persuasive argument for raising rates is that the U.S. economy has never had rates so low for so long, and no one really knows what the effects will be. The housing bubble that caused so much grief to the global economy was the result of greed, avarice and dishonesty — but also of low interest rates.
Institutional investors such as pension funds, hedge funds and sovereign wealth funds were seeking decent returns from the conservative portions of their portfolios. With bonds and money market accounts paying so little, Wall Street invented a story about how it could package high-risk mortgages in such a clever way that the overall bundle would be low-risk while providing attractive returns.
As I wrote yesterday although I’m of mixed mind (as usual) I don’t think that the merits of a rate increase at this time outweigh the risks. Inflation is low and I don’t see how an interest rate hike would improve employment. I don’t favor another round of quantitative easing. I just think we need to have a contingency plan.
I’m sure whatever the Fed does will be to the benefit of the wealthy & connected and to the detriment of every other American. So I don’t care about this any more than I do the Irani nuclear deal.
You ask good questions but when It comes to this one, WHO do you mean by WE?