{"id":16377,"date":"2016-01-12T13:27:14","date_gmt":"2016-01-12T18:27:14","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16377"},"modified":"2016-01-12T13:27:29","modified_gmt":"2016-01-12T18:27:29","slug":"whats-behind-the-feds-decision-to-raise-interest-rates-in-a-struggling-economy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16377","title":{"rendered":"What\u2019s Behind the Fed\u2019s Decision to Raise Interest Rates in a Struggling Economy?"},"content":{"rendered":"

What\u2019s Behind the Fed\u2019s Decision to Raise Interest Rates in a Struggling Economy?<\/a><\/h3>\n

Much has been written and broadcast over the past few weeks in the financial media and the business pages of general-interest newspapers debating the wisdom of the decision in December by Fed Chair Janet Yellen and the Federal Reserve Board to raise interest rates for the first time in almost a decade.<\/p>\n

\n

On one side of this debate are people who say that the Fed needs to do this to prevent inflation from taking off. On the other side are people who warn that pushing up interest rates at a time when unemployment is still at a historically high level (and when real unemployment is more than double the official 5% rate) risks making things worse.<\/p>\n

The increase of 0.25% in the Federal Reserve\u2019s benchmark federal funds rate \u2014 the rate banks charge each other for holding short-term funds \u2014 was pretty minimal, but the arguments for raising the rate at all are absurd on their face.<\/p>\n

The\u00a0New York Times<\/em>\u00a0quoted Yellen as saying interest rates needed to be pushed up lest the economy begin \u201coverheating\u201d! As she put it, had rates not been raised last month, \u201c\u201dWe would likely end up having to tighten policy (meaning raising rates) relatively abruptly to prevent the economy from overheating,\u201d which she said could then throw the US back into recession.<\/p>\n

What planet, or more specifically, what national economy does Yellen inhabit?<\/p>\n

The US is so far from being an \u201coverheating\u201d economy it\u2019s not funny. Official unemployment has remained stalled at 5.1% for three months now, but that is really a bogus number created during the Clinton administration when the Labor Department obligingly eliminated longer-term unemployed people who had given up trying to find a job from the tally of the unemployed, so their numbers wouldn\u2019t embarrass the administration.<\/p>\n

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

What\u2019s Behind the Fed\u2019s Decision to Raise Interest Rates in a Struggling Economy? Much has been written and broadcast over the past few weeks in the financial media and the business pages of general-interest newspapers debating the wisdom of the decision in December by Fed Chair Janet Yellen and the Federal Reserve Board to raise […]<\/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":[11643,303,305,11644,431,451,534],"class_list":["post-16377","post","type-post","status-publish","format-standard","hentry","category-economics","tag-dave-lindorff","tag-fed","tag-federal-reserve","tag-interest-rate-increase","tag-interest-rates","tag-janet-yellen","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16377","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=16377"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16377\/revisions"}],"predecessor-version":[{"id":16378,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16377\/revisions\/16378"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}