Fed up, not Fed down
Article Abstract:
There is a mistaken view that not changing interest rates is a neutral policy, yet US interest rates levels represent loose policy, with drops in rates in response to a crisis in financial markets in fall 1998. Real interest rates are higher than average in the US, but US growth rates are above their sustainable average, and higher stock prices push up consumption. Consumer price inflation is linked to lower petroleum prices, and this could change. There are also risks from asset price inflation. Other central banks, in Japan and Europe, can cut rates. The Federal Reserve should not be maintaining overvalued stock prices.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1999
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A helmsman in dangerous waters
Article Abstract:
Federal Reserve chairman, Alan Greenspan, has to balance the risks of inflation and recession. He has stated that problems could arise from either area, and that monetary policy has to be able to adapt quickly. There is concern about domestic corporate investment and consumption due to a lower capacity utilization rate and a negative personal saving rate. A drop in stock prices could hit consumption. The economy may be less vulnerable to inflation, but interest rates are more likely to be raised than lowered.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1999
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Wishful thinking?
Article Abstract:
Issues relating to US interest rate policy and the chances of the Federal Reserve preventing a recession are examined in detail.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 2001
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