Comments on: The Fed & Interest Rates http://briansullivan.blogs.foxbusiness.com/2008/08/19/the-fed-interest-rates/ FOXBusiness Fri, 20 Nov 2009 18:24:21 -0500 http://wordpress.org/?v=2.8.5.2 hourly 1 By: Dave Swiderski - Penn State University http://briansullivan.blogs.foxbusiness.com/2008/08/19/the-fed-interest-rates/comment-page-1/#comment-683 Dave Swiderski - Penn State University Wed, 20 Aug 2008 11:02:03 +0000 http://briansullivan.blogs.foxbusiness.com/?p=71#comment-683 The Fed is making a HUGE mistake in keeping interest rates artifically low while inflation runs unchecked. Berneke needs to go NOW because of his misguided policies. If food and energy were factored into the equation, we'd be running about 7%-8 right now, maybe more. Their main priority should be to lower inflation first and get a handle on it and NOT worry about stimulating the economy. Inflation not only erodes people's retirement savings, but it also has a devasting effect on middle class America. The problem with our government is that there are too many politicans who refuse to let our economy take its natural course and want to keep the good times going forever, and it doesn't work that way. Even if we slide into a short-term recession while lowering inflation at the same time, it's better than getting the government involved. All they do is muck things up and make it worse. The Fed is making a HUGE mistake in keeping interest rates artifically low while inflation runs unchecked. Berneke needs to go NOW because of his misguided policies. If food and energy were factored into the equation, we’d be running about 7%-8 right now, maybe more. Their main priority should be to lower inflation first and get a handle on it and NOT worry about stimulating the economy. Inflation not only erodes people’s retirement savings, but it also has a devasting effect on middle class America.

The problem with our government is that there are too many politicans who refuse to let our economy take its natural course and want to keep the good times going forever, and it doesn’t work that way. Even if we slide into a short-term recession while lowering inflation at the same time, it’s better than getting the government involved. All they do is muck things up and make it worse.

]]> By: Patrick http://briansullivan.blogs.foxbusiness.com/2008/08/19/the-fed-interest-rates/comment-page-1/#comment-682 Patrick Wed, 20 Aug 2008 06:02:55 +0000 http://briansullivan.blogs.foxbusiness.com/?p=71#comment-682 This has happened before. Rising prices and slowing growth.. stagflation. In theory it shouldn't happen but it happened in the 70s and is happening now. A higher price index doesn't necessarily mean growth. It could just mean that producers are trying to compensate for a lack of sales and decreased output likely due at least in part to rising fuel costs. In that frame of mind, I would think that raising the GDP which has been relatively stagnant lately would be the best course of action. This has happened before. Rising prices and slowing growth.. stagflation. In theory it shouldn’t happen but it happened in the 70s and is happening now. A higher price index doesn’t necessarily mean growth. It could just mean that producers are trying to compensate for a lack of sales and decreased output likely due at least in part to rising fuel costs. In that frame of mind, I would think that raising the GDP which has been relatively stagnant lately would be the best course of action.

]]> By: Tom http://briansullivan.blogs.foxbusiness.com/2008/08/19/the-fed-interest-rates/comment-page-1/#comment-681 Tom Wed, 20 Aug 2008 00:36:28 +0000 http://briansullivan.blogs.foxbusiness.com/?p=71#comment-681 I hope that the Fed raises rates in one of the upcoming meetings. I believe that the the negative effects of higher rates (which should be pretty small as rates will still be low) will be more than offset by decreased inflation expectations, especially if the dollar strengthens, which will further bring down the price of commodities. I hope that the Fed raises rates in one of the upcoming meetings. I believe that the the negative effects of higher rates (which should be pretty small as rates will still be low) will be more than offset by decreased inflation expectations, especially if the dollar strengthens, which will further bring down the price of commodities.

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