|
Central Missouri | imo, the difference between then and now is the deficit. Back then when they raised rates it slowed the economy but the deficit wasn't 12 trillion plus the annual deficit of 1.4 trillion. So they slowed the economy a bit; not a real big problem because QE wasn't even invented.
Today raising rates will slow the economy and increase the cost to fund the 12 trillion deficit. An increase of 1% in rates adds between 50 and 100 billion in annual interest cost plus slows the economy. The old rock and a hard spot. Kinda seems like if they raise rates, more QE to fund deficit; if they keep rates low, possibility of currency problems and inflation. | |
|
|