Yes it will slow down economic growth, in fact the economy is barely growing with rates at all time lows. That is why raising interest rates would crash the economy. This scenario is unpleasant however keeping rates lower for longer will cause far more damage down the road. Of course the fed will not do this because they know what the consequences are.
Thanks for the visuals. I wonder how long the Fed will go before acknowledging they backed themselves into a corner with ineffective policy? It would be nice if they just admitted they had made a mistake, informed the public they were going to change course, and proceeded to raise rates (at least to levels commensurate with inflation). Yes, in the short-term markets would correct and economic numbers would probably continue to soften, but it would restore confidence in the system over time.
Yes it will slow down economic growth, in fact the economy is barely growing with rates at all time lows. That is why raising interest rates would crash the economy. This scenario is unpleasant however keeping rates lower for longer will cause far more damage down the road. Of course the fed will not do this because they know what the consequences are.
Thanks for the visuals. I wonder how long the Fed will go before acknowledging they backed themselves into a corner with ineffective policy? It would be nice if they just admitted they had made a mistake, informed the public they were going to change course, and proceeded to raise rates (at least to levels commensurate with inflation). Yes, in the short-term markets would correct and economic numbers would probably continue to soften, but it would restore confidence in the system over time.