Absolutly,raise rates in small increments to control the slide of the dollar. The rate reductions have done very little to help the homeowners who got in over their heads and I really don’t think that was what the Fed had in mind. They are interested in helping out the big investment firms at the cost of everyone else. We are now paying for this bailout of greedy bankers and investors who are very well connected. Let the dollar come back and the oil bubble will bigin to lose steam. Of course that will probably not happen because many of the same well connected folks are also the ones speculating on oil and making money at the expense of everyone else.
Thomas has it wrong; the shareholders in the Fed are the taxpayers, not a bunch of greedy private banks and investment houses. The Fed just acts as though it existed as a private entity, solely to benefit those it considers its shareholders, the banks and investment houses. Friend Ben will make sure that the banks and investment houses will get by with a little help from their friends. The rest of us exist to pay for it. Get real, expecting anything else.
Today’s inflation is a result of the Bush/Cheney EXPANDED Government! They have spent Trillions on inflationary programs.
Military, Immigration, Border Control, War on Drugs, ICE agents, Police spending are inflationary. They cause vast amounts of money to be injected into our economy, but fail to increase the production of goods and services that can be purchased by the public. Therefore, we have more dollars chasing the same amount of goods and services, as before this spending.
Now add to this all the law inforcement and judicial spending of the State and Local Governments having the same effect. Do you ever consider that most elected officials (not referred to as Leaders) are lawyers. Why would they support tougher sentencing, more Law Enforcement? Because it creates a bigger industry for their profession, more charges means more people to represent, more judges appointed, etc.
Then you have the large corporations that build and run prisons, they have a big lobby.
Take all this spending for the last decade the GOP has been in control, and it is the CAUSE OF OUR CURRENT INFLATION!
Yes. And it should be a huge one-time deal. 10% right off the bat, show the world we mean business. That does seem quite huge and the impact would be hard and, at first, painfull. But after the pieces fell into place, all would be OK.
The Fed should do that in concert with the government issuing tax breaks -up to 100% in some cases- to companies that spend a lot on fuel. Airlines and transport companies would recieve the largest windfall and would only get that if they passed those savings to their customers. The lost tax revenue would be made up through consumers having more room to buy things like big ticket items and plane tickets.
Over generalising, but I think the point gets across.
It’s been said that inflation is caused by too much money chasing too few goods. So con artists with “too much money”, acting together but where we don’t know where they are, have taken over the oil commodities market worldwide to sucker other people into the market. After the con artists quit speculating, the new suckers will be trapped with falling oil prices, and will lose money in the process.
But I say there is no inflation. When people have to spend more money on gasoline, then there is that much less money available for frivolous purchases, like plastic doodads made in China. Do we really need all the stuff made in China, or do we need to do without ?
If people just “do without” the clutter, as in “stay out of the stores” except for basic groceries,
and stop driving hither and yon just because they want to drive, then things for most of us will get better.
Over 15 years ago I read a story that the middle class, made up of middle-aged people, is really the Muddle Class. And those people were just boring as all get out, because they ignored the “latest thing” and “this is in and that is out”. But they muddled through life handling the hassles and the annoyances and disasters, and survived, without making a big fuss about it.
Now I am in the muddle class, and I just wonder, what’s gonna happen next.
I think the fed should try to take some air of of this commodities bubble… lowering rates down to 1% was what caused this real estate bubble, why not just raise rates up 1/4 of point..to 2.25%,then see what the reaction is..let a little air out of the commodites bubble.
Oil at 135$ a barrel is doing nothing but stifling business and american consumers etc.. you need to a little take air of that.
bubbles almost always never end pretty-whatever they may be.
Probably Ben will lower rates to ride to the rescue of Lehman Bros. Unfortunately, most of the discussion has been carried on in obsolete terms, when the effects of actions could be considered only in terms of effects on the isolated US economy, with the assumption that actions could be taken to help the US economy without considering the effects on the economies of the rest of the world and their reactions. This is no longer the case and decisions should no longer be taken on the basis of their effect on an isolated US market.
Many of the comments supporting raising the interest rate revolve around lowering oil prices and other imports. This is a very short term view. While nobody likes paying more at the pump, in the long run more expensive gas ia a good thing for three reasons.
1) It ecourages energy conservation. This actually happened over the memorial Day weekend when Americans drove fewer miles than the year before.
2) It ecourages research and development on alternative fuels and other energy technologies that could cause less harm to the environment. This could also increase US security by making us less dependent on foreign oil in the long term.
3) It makes other energy technologies that are currently available more attractive.
If we look at the price og gasoline in a historical perspective we find that $4 per gallon gas today is the same in real dollars as $0.64 per gallon was in 1967. While I remember my parents paying less than $0.35 per gallon in 1967 we need to remember that over the decades cheap gas has largely resulted in Americans driving huge, gas gussling vehicles and living in communities where we cannot get along without driving our cars for everything we do.
the economy stinks to high heavens with fed funds at 2% and stimulus checks flying around everywhere
the economy has lost jobs five months in a row despite the birth death model adding about half a million over two months
greenspan never started a hike cycle
unless the economy created 200k jobs a month for a few months in a row
a fed hike would send arms rates soaring and foreclosures to the moon
Plus the oil companies are spending $20 dollars a barrel to get the oil out of the Gulf of Mexico and pollute my backyard and expose me to cancer from the benzine they produce. I should get a 15 billion dollar law suit settlement from them and free gas for what they have exposed me to.
The executives of these oil companies don’t live in Houston where all the pollution is. They live in pristine country in upper New York State or California.
NO!
Inflation is LOW!! The CPI is 4%, oil is only $0.25/cup. Again, in all my posts, not a single person has come forth with a liquid that we use on a daily basis, that sells for that cheap! Not coffee, not coca-cola, not beer. Not even water! There is more than enough oil, more than enough sources. Even though we have a weak dollar from the Fed, which is causing the recent commodity boom, wages expectations has not filtered into the general economy. Without strong unions, circa 1980, we will NOT return to 1970s style inflation.
With that being said there is a big BUT. If the most liberal Senator in the last Congress, Barak Obama, becomes President, and gives the unions undeserved power, then the unions will interfer with the free markets by demanding higher salaries! At that point, the FED should hike just as fast as they lowered them- by 75BP every time they meet!
Posted By John, Ellicott City, Maryland : June 10, 2008 10:54 am
I GET 2,000 gallons of water from the city of HOUSTON water department for 9.38 cents? anyway lets call it 10 dollars. that means for a dollar I get 200 gallons or 0.03 cents per cup if I did the math right.
Plus we are past peak oil. Even if the cost of oil was only 1 dollar a barrel why would the Arabs or anyone else want to sell it for less than $1,000 a barrel? The dinosaurs aren’t making anymore of it for another 250 million years. We only have a twenty year supply left.
If the Feds raise interest rates to 7 percent we may just barely survive the coming Great Depression. Otherwise forget it with the Fed having pumped more than 1 trillion dollars into the banking system and they are still having tens of billions of dollars of losses we are in very deep trouble.
Raising the rates won’t do a thing unless CONGRESS LOWERS THE BUDGET. In order to fight inflation 2 things MUST happen. Decrease the govt budget and at the same time lower the rates. Doing one without the other does nothing. Plus, who really thinks that gas prices will really lower??!! I’ve never experienced it, have you?
There needs to be an increase in rates NOW! Everytime interest rates get cut equals weaker dollar and higher oil prices which does not help struggling home owners. Higher Gas prices make it harder to struggling owners to make a mortage payment.
I WANT CORN-FREE DIESEL! This in turn will lower our prices and re-stabilize our economy. All our service people, trash, electricity, repairmen, not to mention our food and supply shipments rely on diesel gas. Get the corn the heck outa my tank!
Go ahead and raise rates. Then people will stop paying their adjustable mortgages and credit cards, which will further distress the banks. When the banks close ‘the people’ will wait out the 7 years to get our fdic insurance to pay them. Then how will the people hold on w/o money at all? What a mix the govt is in. Raise rates, save the people, lower rates, save the banks. Betcha that Ben chooses to save the banks. He won’t raise or lower, he’ll hold pat and continue the inflation at the current rate.
This is the result of letting a bunch of greedy investment houses and banks control our money system. Now the Fed has the power to directly lend it’s members (Goldman, JP Morgan, etc) funds at a low interest rate at the expense of inflation for the typical American. Then they take a lot of these cheap loans and directly invest into oil commodities and the cycle of inflation continues. The rate cuts help no one except investment houses and banks.
Do what’s right for America Mr. Bernake and up interest rates to 2.5% or do you just cater to the Federal Reserve shareholders?
Every time the Fed lowers rates to excessive levels some type of bubble forms. Last time it was real estate and now it’s commodities. Rates this low are riduculous and they will do nothing to help the housing market. Low rates have created the odd siuation of stifling growth. Low rates created a weak dollar which spiked oil and other commodities. Try having a vibrant, growing economy when oil is at $130 a barrel. If the fed raised rates watch oil come back down. Not to mention that it will improve the incentive to save.
I feel that the Fed should raise interest rates NOW as a result of the slumping dollar and declining consumer confidence. Seeing the dollar slide against a slew of international currencies is doing nothing to encourage consumers to spend thier rebate checks.
The Fed should raise rates as soon as possible. With a stronger dollar, oil and other commodities will drop (in dollar terms). Oil has risen as the dollar has fallen, because oil, as an international commodity is really being traded in currencies other than the dollar at present, eg., the Euro. If the dollar were to return to the level it was when the current administration took over (about .8 Eu to the dollar), it would not be surprising to see oil drop to the $75 to $80/bbl range. Gasoline would also fall, but a bit later.
Yes, the Fed should raise rates back up to 5% as quickly as they lowered them. When the federal funds rate is 1-2% above total headline inflation they will have reach equilibrium. Rates should never have been cut from 5.25% to begin with, but Bernanke felt it was necessary to offset the $2 trillion dollars in mortgages which will go bad before the credit crisis is over.
This month would be great. Last month would have been even better. Maybe not a drastic increase, but rather eas on a little each month to get momentum restored for savers. (in case anyone actually does that).
Way to go big Ben, just as investors are getting comfortable with the T bill again lets bring up inflation, to scare them off of it so interest rates stay high. (way to help the housing market) Bank earnings are being released in the next couple of weeks, that should shake up wallstreet pretty good. Your giving investors no choice but to invest in oil.. Way to really help the economy!!! Jacka@@
Stephen,
Your adjustable rate mortgage isn’t based on the Fed controlled interest rate. It is controlled by the yield of Treasury Bonds. Banks usually price their mortgage at 2% over the current treasury yield.
Treasury yields are supposed to follow along with the bank interest rates. However, if you follow the treasury bond market, you’ll notice that the notes are not trending the way they should. This is due to the credit crunch, which is being fueled by a weak dollar.
Rate rates, increase the dollar’s attractiveness, which increases investment in bonds, which raises the price, which lowers the yield, which lowers your ARM.
Or you could always lock in a rate instead of dealing with the time-bomb that is ARMs.
No. Keep rates at 2% until the economy starts to recover. In the mean time, raise margin requirements on food and fuel futures contracts from the current 7% (!!!) to at least 50%. This should be enough to drive out the speculators who are trading uncovered contracts (i.e. sellers who have no grain to sell and buyers who have no place to put the oil when it is delivered). Do it today.
I think raise rate is the last thing to do now. First, we should work from outside in and look at saving money from somewhere else such wars, use our foreign policy wisely & make dollars strong. Look closely on tax on foriegn imports. You can increase tax on unnecessary things and improve on the daily needed things.
I don’t tink the FED is stupid enough to do anything to raise interest rates yet. They know that the economy has not hit bottom – inspite of their trying to TALK it out of the downturn.
They have been trying to TALK away the crisis since last summer when they started saying things weren’t going to be that bad. They have been saying that ever since, evn if they don’t believe it.
They know we are not going to come out of this financial insolvency, liquidity crisis by doing the opposite of what it needs. The housing market sure does not need to see mortgage rates rise. Those with adjustable rate loans (me!) don’t need higher rates!
Bernanke TALKING a strong dollar is not a bold move and is being done in stead of raising rates. The Fed has been behind the curve since way last spring when it should have started lowering rates and it is not likely now to jump ahead of the curve only to have to back track in the Fall when the economy really starts to hit bottom with a slow recovery barely in sight.
It wouldn’t break my heart one bit to see them raise the Fed funds rate, and soon. “Too much easy money” got us into this mess–”even more easy money” isn’t the solution. Some people will probably get burned by this, but maybe pain will start to teach people to make better decisions in the future…? The most I’ve ever made in my life is $40k/year, and I’m not having problems (I rent and have savings and investments, which might have something to do with it). Please excuse me if I’m a bit unsympathetic to the crowd that overspends and overreaches.
Raise rates and get ready for bank failures. Think your money is safe because it is FDIC insured? Think again! Once a few of the big banks go under there are very limited options. Print more money or tell savers “too bad suckers…”
As for the oil markets, there’s much less speculation than most everybody thinks. Oil gets pumped out of the ground and it gets consumed. If you buy a contract you either have to sell it BEFORE it comes due or take delivery of the oil. The only way to drive up the price long term is to withold crude from the market and store it. There is no evidence of that happening right now. While there is some short term speculation, most of the price increases are due to increased demand and falling supply.
I supposed it’s easier to blame speculators, dictators, hurricanes, insurgents, liberals, oil companies or Santa rather than the guy in the mirror. Denial is a river in Africa.
LOOK AT THE GRAPH IN THIS ARTICLE: When interest rates were 1%, oil was $40/barrel. When interest rates were 5%, oil was $80/barrel. Now interest rates are 2%, and oil is $135/barrel.
THUS, THERE IS NO CORRELATION BETWEEN THE FED FUNDS RATE AND THE PRICE OF OIL.
Worldwide oil production has stalled at 85 million barrels/day. This is the only reason why oil is $140 and will go to $200 by 2009.
Stop wasting so much fuel. This is the only way to steady oil prices.
It appears our main problem is inconsistent application of process. We dropped rates regularly for a long time far below where they should be. Then we raised them. Then we cut them. It seems we are trying to predict what the results may be. You cannot predict results. That is putting the cart before the horse. Right now, the economy is writhing from odd pressures that are not clear. We need to take some time to let the water clear so we can see what we truly need to do to support and enhance economic performance, not just continue to muddy the water with more change. Let’s not behave in a manner that says every event requires a response. Sometimes the best response is to wait and see. I don’t think we have gotten it right for some time. Raising rates now would send the wrong signal. Let it rest a while.
The Fed should raise rates today. My case for a rate raise is as follows:
1. In the long run, the credit market will be healthier. I say that because *everyone* in finance has long been asserting that “Americans need to save more cash.” That cash protects them in times of turmoil and provides capital to be loaned. OK, by my reply is “Whty should they? It’s not as though banks pay an honest interest rate on money saved as cash in CDs or garden variety savings or checking accounts.”
2. The Fed should raise rates because inflation is hurting the American consumer coming and going. High oil prices hurt Americans at the gas pump, at the grocery store, and in the increased trade imbalance.
3. Banks and other financial institutions have not passed on the extant Fed rate reductions. They’re simply using the increased difference between their borrowing costs and the interest rates that they in turn charge borrowers to line their pockets.
The only people benefitting from a low Fed rate right now are the OPEC states and the investment banking set. Low Fed rates have only scr**ed Joe Average American.
OUR ECONOMY IS DRIVEN BY OIL .The speculation in the crude markets have and will continue to be a more important factor in driving inflation than the Fed playing yo yo with rates.
If the Government really wants to serve the people that they represent,they need to( Enron) the oil company’s and remind the world that we are still the greatest nation on earth and not stand weakly by and let 3rd world leaders dictate to us. We have and should use our oil reserves and drill in Alaska now, not in 10 years.
” Its the economy stupid.”
Isn’t this great, raise interest rates on people who have adjustable rate mortgages, you know we middle class folks. Maybe this government does not consider higher interest rates an inflation marker like oil and food, but those of us who will be paying more each month now our cost of living will be higher. If it looks like a duck and talks and walks like a duck, its a duck – are they not smart, all those federal reserve leaders?
Lowering rates and printing money to “inflate away” debt, although attractive to the boobs in Washington that have squandered the future of our children is, and has been a formula for disaster. The weak dollar policy of the current administration has created added upward pressure to $ denominated oil prices in an increased demand environment.
Let’s delflate now by moving to a strong $ policy. if Brazil can thrive with 12% rates and 5% inflation, we should too.
And, oh yeah, how about spending some real money on energy research and develop a real policy to wean us off Mid-east and Venezuelan oil thus sending our $’s off to countries that hate us!
Of course the fed needs to raise interest rates. Im not ready to pay $5+ per gallon of gas and $4+ for a gallon of milk. I think we’ve had enough, its time to raise interest rates so the dollar strengthens and food becomes affordable.
St. George of Utah:
Great idea!!!
Just one question though. Where would the government find the money to fund these projects?
Borrow more from China?
Get real!
Yes, the interest rates need to be raised. No where has the interest reduction been transferred to the public, where it was supposed to help. Instead, the banks have kept the break, and used the cash to invest in commodities while the cash isn’t available to the public. The public has paid dearly, by inflationary products, and it has not helped us. Also, there is no reason to save. The public should not have to pay the bill so that a few investors can manipulate the oil futures and get rich. If you don’t believe this is happening, then why every time the oil investor bank speaks, the price jumps. Has nothing to do with reality, but on the hopes that the banker is correct, and the investor trying to cash in. If OPEC and others truly want to fix things, then sell the oil at cost, rather than on futures.
no, raising interest rates will cause more distress on the nations housing situation. It may curb the recession, but the mortgage loans will hurt consumers more than the recession . Interest rates around the world are on the rise, the US should not consider raising rates at this point in time.
Susan harrer
Westlake Village CA
The FED needs to raise interest rates and stop printing so much paper money that isn’t backed by anything. Investments of those of us smart enough to save are suffering because of the ignorant who didn’t read a contract. After a 2-3% increase, it should be stable to allow the economy to stablize. This will strengthen the dollar on the world market.
I think they need to raise them back up to prevent inflations.
So far lowering the rates has not helped the lending industry. I provide residential loans in GA. Our mortgage rates were lower when they dropped to 3% than they were at the current 2% rate. Our rates are going up as we speak due to high gas prices, foreclosure rate is at it highest level, fears of inflation, etc. The first time the fed lowered the rate from 5.25%, I was able to offer 5.125% on a 30 year fixed conventional mortgage. However, this was only for a few days until the lenders raised their rates back up to slow their volume. Today I cant even offer a 6% rate to someone with perfect credit uless they are willing to pay points.
Bottom line is that I personally don’t think the economy will get better until a new president takes office since many people think Pres. Bush has created this mess.
The problem is that the rate cuts didn’t work. And they didn’t work because they didn’t target the actual problem, which was the creditors themselves. The market was allowed to fall windly out of whack, and now we’re suffering through an over-correction. It’s the cycle of economics.
Credit was too available over the last 15 years. Americans were allowed to go so deep into debt that they are drowning, losing their homes, and going bankrupt. Corporations are in the same situation, borrowing billions to execute leveraged buyouts with no idea how they will pay it back.
The market needs to be allowed to adjust before we try to tinker with it any longer. The overreaction of the Fed has destroyed the dollar and sent us deeper into a recession than the housing crash did. Instead of helping control inflation, which is their job, the Fed is attempting to control the entire economy. They need to stop.
I don’t think so. The causes of our economic problems are a lot deeper than just the interest rates. I don’t think having them yo-yo up and down will help. Now, if the feds could vote to hold the Presidential election sooner, that might help!
No rate increase—- but the President and Congress need to pass emergency legislation for fiscal stimulus for infrastructure projects.
Projects to ensure increased production and National Security, projects like the North American Water and Power Alliance, MagLev Train System.
These two projects would allow for increased agricultural, industrial, and transportation output, while at the same time helping to reduce our dependence on OIL.
They will provide hundreds of thousands of well paying jobs, this will help end foreclosures, and thus help with the credit crisis.
Raising interest rates would be a bad idea. The fed needs to continue to fight slow economic growth and unemployment. They should leave rates alone. Let’s see what the last few decreases have really done. Oil is high not because of inflation but because of speculation. That’s why the price plummeted last week when the commodities trading commission announced probes into price manipulation.
Raise the rates and those who might be hurt by greed and overspending on their credit card be d#%m. And NO bailout of home owners !!! Sure CNN will find poeple caught up and suffering but just watch HGTV for one night and see how many under 30 folks want it ALL and want it NOW. One single woman was paying $3,500/month for a 2,500 sq. ft. dream home. Lets get real folks. Just because you are breathing doesn’t mean you DESERVE every amenity in the world at a young age. And who made you buy that SUV that guzzles $4/gallon gas. It wasn’t the government or the President – just you wanting it ALL. Oh by the way as I drive my Prius to my completely paid for home I’ll wave to you at the gas station.
Yes! Rates should not have been cut in the first place to reward the morons (including everyone involved in the mortgage meltdown, everyone who over extended, and everyone who are stupid enough to have credit card debts) and punish the diligent.
Whatever the fix is, keeping rates low is not it.
So, Yes! Hike the rates and let the economy begin to heal, even if pain will be caused to the morons.
They deserve it. Period.
While the Fed’s role clearly includes steps to impact inflation (they cannot control it) we cannot let short term concerns totally control our fiscal policy. Currently inflation is low and the impetus to raise rates seems to come from a desire to prop up the dollar. In the long run an artificially strong dollar is bad for our economy. It makes our goods and services more expensive for the rest of the world to buy, which in turn provides more incentive to move manufacturing and service jobs overseas. It also makes imported goods artifically cheap, all of which adds to our trade deficit.
We have so many problems at this point, it would probably be best to increase the rate by 1/4 of 1%. However the Fed should do whatever is necessary to stop the speculation in Oil. That would be the best way to curb inflation.
I am going on my Honeymoon to Italy next spring. I am really hoping the Fed raises interest rates before spring so that my dollars aren’t worthless over there.
Rate hikes are counter productive. With today’s credit reporting industry, there is no rational reason for rates to ever go above 4-5% at a maximum. The problem is not the rate cuts, the problem is caused by the mass funneling of cheap loans from the fed into the commodities markets by investment banks. The solution is to triple margin requirements for oil contracts.
The Fed should do whatever is necessary to reduce the money supply. We are awash in cash. The amount of dollars sitting in the largest money market funds is astounding. Let a recession happen…ever hear “no pain, no gain”? We need to get on solid fiscal ground.
How about an EMERGENCY rate hike! Maybe they will meet behind closed doors on Sunday and “surprise” the market 10 minutes before it opens! Wouldn’t that be grand? Jawboning… that is all it is. They can’t raise the dollar or else it will kick the “jobs” pillar out from under the economy. That is the only pillar left!
To Mr. John Ellicott:
Water isn’t .25/cup. Lordy, you’d starve if it cost that much to irrigate crops. What do you count as “water”, half pints of Elivan?
We need leadership in all areas of the financial markets ASAP. It boggles the mind that all these smart people can get it so wrong these days? I firmly believe that greed is at play and no one has the sack to stand up and stop it.
What is needed is a direct policy reform and regulation of the markets to throttle back potential bubbles and still function freely. Granted the concepts are extremely complex and need attention, but what I don’t see are our government officials taking steps to alleviate the growing monetary problems we Americans are facing – High priced fuel, food, and healthcare. While our jobs are going away and the return on investment is waning.
I’m asking outright: The Fed, Congress, State, and Local Officials need to act right now to get involved, understand, and offer solutions to our problems – not lip service. Isn’t that what we pay them to do?
Didn’t we try this once before, move the fed rate from 5% to 2% and then up to 3%, oh yeah, it was 1930 and that turned out pretty well, for “the shorts”.
NO!
Inflation is LOW!! The CPI is 4%, oil is only $0.25/cup. Again, in all my posts, not a single person has come forth with a liquid that we use on a daily basis, that sells for that cheap! Not coffee, not coca-cola, not beer. Not even water! There is more than enough oil, more than enough sources. Even though we have a weak dollar from the Fed, which is causing the recent commodity boom, wages expectations has not filtered into the general economy. Without strong unions, circa 1980, we will NOT return to 1970s style inflation.
With that being said there is a big BUT. If the most liberal Senator in the last Congress, Barak Obama, becomes President, and gives the unions undeserved power, then the unions will interfer with the free markets by demanding higher salaries! At that point, the FED should hike just as fast as they lowered them- by 75BP every time they meet!
The rates were cut too much and too fast. The cost of panic combined with capitulation.
But let’s try not to panic and capitulate to panicky consumers again. Let the rates stay SOMEWHERE for a while. Allow the economy to actually settle and adjust.
Raising rates wont bring oil back down to last years levels, nor will it make corn cheap again. But the consequences of huge speculation in short term commodities will knock the bubble out of commodities soon and hopefully kick the teeth in on the people who are willing to harm 6 billion people to make a spare 100mil.
Yes the Fed should raise it rate to 4% from the 2% it is now. Our problems are not the interest rates it is confidence is the creditor ablility to pay. Inflation is the absolutely the most important function the Fed must control. An increase might actually bring down the price of oil somewhat, and it might actually increase the value of the dollar also helping ease inflation.
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Yes they should,but this academic oaf of a fed chairman has to bail out his Wall street banker friends that created this mess with Greenspans imput.Spend ,Spend,spend,that is all America wants the American people to do,oh they are broke,well let`s get DUBBYA to give them some tax $`s back so that they can spend that too.Home forclosures & repo`s are at a record but spend some more folks.I cannot understand how dumb people are,hence the Fed will not cut the rates but lower them,to keep Wall street happy America broke & in the treadmill of debt,after all who needs savers,the Feds spending our future with DUBBYAS $10,000,000,000,000 debt & counting.