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Offline Idaho_Cowboy

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The Old Fed is Dead
« on: September 20, 2016, 08:09:58 pm »
The Old Fed is Dead
By Robert J. Samuelson
Published Sept. 20, 2016
Read more at http://www.jewishworldreview.com/0916/samuelson092016.php3#pHlQfmMHowYCER2f.99

WASHINGTON -- The betting is that the Federal Reserve won't raise interest rates at this week's meeting of the Federal Open Market Committee, its key policymaking body. There are already complaints that the Fed, which cut short-term rates to near zero in late 2008, is waiting too long to reverse low rates. Last December, the Fed increased rates by a quarter of a percentage point. It hasn't done anything since.

"The Fed will make a major mistake if it doesn't raise rates," says economist Mark Zandi of Moody's Analytics. "The job market is strong and very close to full employment. Inflation is close to target [2 percent annually] and financial markets are in good shape." Yet, Zandi doubts the Fed will raise rates by another quarter percentage point.

The case for standing pat was made by Lael Brainard, a Fed governor, in a recent speech. "Since 2012, inflation has tended to change relatively little ... [while] the unemployment rate has fallen from 8.2 percent to 4.9 percent," she said. Without accelerating inflationary pressures, policy should still favor job creation, she argued.

It's a close call. Whatever happens, the mere existence of debate attests to a remarkable change. It wasn't that long ago that the Fed was seen as almost all-powerful. It gave us (so it seemed) the "Great Moderation" -- a quarter-century (1982-2007) of economic growth with only two mild recessions. A few flicks of its short-term interest rate, up or down, could contain inflation or sustain growth...
Read more at http://www.jewishworldreview.com/0916/samuelson092016.php3#pHlQfmMHowYCER2f.99
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Offline IsailedawayfromFR

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Re: The Old Fed is Dead
« Reply #1 on: September 22, 2016, 12:59:47 pm »
Yellen is a political operative for Obama and the Democrat Party.  A future responsible Congress and President will have to find a Fed Chairman who can clean up this awful political mess created.

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Offline Bigun

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Re: The Old Fed is Dead
« Reply #2 on: September 22, 2016, 01:23:39 pm »
Quote from: IsailedawayfromFR on September 22, 2016, 12:59:47 pm
Yellen is a political operative for Obama and the Democrat Party.  A future responsible Congress and President will have to find a Fed Chairman who can clean up this awful political mess created.



Entirely true!  :beer:
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Offline Free Vulcan

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Re: The Old Fed is Dead
« Reply #3 on: September 22, 2016, 01:41:04 pm »
Quote from: IsailedawayfromFR on September 22, 2016, 12:59:47 pm
Yellen is a political operative for Obama and the Democrat Party.  A future responsible Congress and President will have to find a Fed Chairman who can clean up this awful political mess created.

Unfortunately between the money printing and Obama's deficits, this cake is pretty much baked. All we can do now is endure the pain of the consequences.
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Offline Sanguine

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Re: The Old Fed is Dead
« Reply #4 on: September 22, 2016, 05:25:33 pm »
Quote from: Free Vulcan on September 22, 2016, 01:41:04 pm
Unfortunately between the money printing and Obama's deficits, this cake is pretty much baked. All we can do now is endure the pain of the consequences.

Yes.  And, I doubt those consequences will be blamed on 0bama.  Whoever is next in line will get it.


Edited to add: unless it's Hillary*. In that case it will somehow be the fault of the vast right wing conspiracy.

*God help us.
« Last Edit: September 22, 2016, 05:37:33 pm by Sanguine »
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geronl

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Re: The Old Fed is Dead
« Reply #5 on: September 22, 2016, 05:32:59 pm »
Quote
"The Fed will make a major mistake if it doesn't raise rates," says economist Mark Zandi of Moody's Analytics. "The job market is strong and very close to full employment. Inflation is close to target [2 percent annually] and financial markets are in good shape." Yet, Zandi doubts the Fed will raise rates by another quarter percentage point.

In what dimension is this...
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