The Federal Reserve President Patrick Harker spoke out about the interest rates and what he believes should happen. Harker believes that we have reached the point where we can keep the interest rates steady and let monetary policy take over. The Fed has done a good job right now with bringing inflation down while not having unemployment increase. If we push interest rates much higher and at the same aggression as the Fed has been, this could change and increase the unemployment rate. This increase in the unemployment rate could cause the economy to tank if the inflation rate does not decrease at the same rate. With making the decision to keep the interest rates steady the Fed now has to keep an eye on the incoming data that they are receiving and watch it for any signs that they need to change the interest rates. Using this data is going to be key in making sure the economy does not crash and acting fast enough to prevent any major shifts in the economy.
Source:
https://www.cnbc.com/2023/10/13/philadelphia-fed-president-harker-advocates-holding-interest-rates-where-they-are.html
I hope that Patrick is correct because the interest rates need to stop increasing. We need to Feds to keep an eye on the economy for sure like you said because we do not want a crash! For my newsletter I took a look at employment rates in businesses and businesses actually have been employing more individuals, about 20% of firms have actually increased their employment over the past month.
ReplyDeleteHopefully the federal reserve will listen to Patrick. While sure we should have interest rates somewhat high because of spending. But pushing it so high will only ensure some economic turmoil, especially for the lower classes. Let's hope unemployment will not have a surge.
ReplyDeleteIt would be nice if what Patrick says becomes true. However, the future is unpredictable and other sources I have read have anticipated that the FED may unfortunately warrant that a momentary recession might be necessary to bring inflation down. This of course would not be ideal. I hope the FED can watch and slowly nurse the economy back to health with the current rates without the need or implementation of any more. This would be the ideal solution in my eyes.
ReplyDeletePatrick Harker's perspective on interest rates is important for ensuring a stable economy. A push for aggressive interest rate hikes can potentially increase unemployment and cause economic instability. Data monitoring is indeed essential to making informed decisions and preventing major economic shifts.
ReplyDeleteI believe that what Patrick has to say is very important to the economy in its current state. If what Patrick is saying goes into effect, the benefits that citizens would receive is massive. Although the monetary policies that will arise from a steady interest rate will not be seen right away, at least time will allow the effects to fall into place and allow the economy to move back down out of a current period of inflation.
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