{"id":15388,"date":"2015-12-17T09:34:18","date_gmt":"2015-12-17T14:34:18","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15388"},"modified":"2015-12-17T09:34:18","modified_gmt":"2015-12-17T14:34:18","slug":"doomsayers-are-wrong-so-far-as-u-s-fed-raises-rates-don-pittis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15388","title":{"rendered":"Doomsayers are wrong (so far) as U.S. Fed raises rates: Don Pittis"},"content":{"rendered":"
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Doomsayers are wrong (so far) as U.S. Fed raises rates: Don Pittis<\/a><\/h3>\n<\/div>\n

Breaking the ice on frozen rates has calmed markets, not roiled them<\/strong><\/p>\n

\"U.S.<\/p>\n<\/div>\n<\/div>\n

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U.S. Federal Reserve chair Janet Yellen oozed confidence as she announced a hike in interest rates yesterday. Markets responded in kind. (Reuters)<\/p>\n<\/div>\n<\/div>\n

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“Remember, we have very low rates and we’ve made a very small move.”<\/div>\n
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With those words, U.S. Federal Reserve chair Janet Yellen meant to reassure ordinary Americans that yesterday’s quarter-point\u00a0hike\u00a0in\u00a0interest rates<\/a>, labelled “historic” after seven years near\u00a0zero, was really nothing much to worry about.<\/p>\n

With everyone from Harvard’s Larry Summers, to\u00a0IMF boss Christine Lagarde to the\u00a0Financial Times<\/a>\u00a0warning of the economic risk of raising rates, it appears that, so far at least,\u00a0Yellen’s\u00a0reassuring words were effective far\u00a0beyond Main Street, extending to\u00a0financial\u00a0markets around the world.<\/p>\n

If\u00a0there are economists\u00a0who think interest rates should stay at zero forever, I’ve never met them. So the issue was not whether rates should rise, but when.<\/p>\n

With almost two years in the job as head of the world’s most powerful central bank, Yellen\u00a0was able to present a calm and rational case for why the Fed did have to move now.<\/p>\n

Calming effect<\/strong><\/p>\n

As some\u00a0predicted earlier this year<\/a>,\u00a0the announcement of a rise in rates was far more soothing than the speculation and doomsaying that came before.<\/p>\n

Challenged at yesterday’s news conference by a reporter who quipped central banks often kill off periods of economic growth by raising rates,\u00a0Yellen had a confident response. She said the reason that sometimes happened was that central banks moved too late, allowing inflation to get out of control.<\/p>\n

“At that point they’ve had to [raise interest rates] very abruptly and very substantially,” said\u00a0Yellen. “And it has caused a downturn, and the downturn has served to lower inflation.”<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Doomsayers are wrong (so far) as U.S. Fed raises rates: Don Pittis Breaking the ice on frozen rates has calmed markets, not roiled them U.S. Federal Reserve chair Janet Yellen oozed confidence as she announced a hike in interest rates yesterday. Markets responded in kind. (Reuters) “Remember, we have very low rates and we’ve made […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3544,3000,4936,303,305,431,451,534],"class_list":["post-15388","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cbc","tag-cbc-news","tag-don-pittis","tag-fed","tag-federal-reserve","tag-interest-rates","tag-janet-yellen","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15388"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15388\/revisions"}],"predecessor-version":[{"id":15389,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15388\/revisions\/15389"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}