Jared Meyer writes:\u00a0 Even though the Federal Reserve has ended its massive bond purchases, interest rates remain near zero, where they have been held since late 2008. Low interest rates remain even though the economy has improved.<\/p>\n
The Fed believes that if it can keep long-term interest rates low, business investment and consumer spending will increase and the economy will grow. However, the Federal Reserve is unable to singlehandedly create economic growth. Its role is instead to execute sound, consistent monetary policy, which provides the backdrop for a strong economy.<\/p>\n
Historical evidence shows that interest rate increases during the early-to-middle stages of economic expansions do not endanger economic growth. As Boston College economics professor and Shadow Open Market Committee Member Peter Ireland argues,\u201cThese higher rates are nothing to be feared. To the contrary, they are a necessary component of a broader policy strategy designed to keep the economy growing along a stable path while maintaining the environment of slow-but-steady inflation that has served the country so well, going back more than a quarter century to the days of Paul Volcker\u2019s Fed chairmanship.\u201d<\/p>\n
The Federal Reserve\u2019s continued accommodative monetary policy is unlikely to increase GDP or employment growth. Instead, suppressing interest rates in times of increased and sustained economic growth increases the risk of inflation. It is time for the Federal Reserve to let interest rates rise with the improved economy.<\/p>\n
Jared Meyer writes:\u00a0 Even though the Federal Reserve has ended its massive bond purchases, interest rates remain near zero, where they have been held since late 2008. Low interest rates remain even though the economy has improved. The Fed believes … Continue reading ![\"Interest](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/01\/Interest-Rates.jpg\")
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