Interest rates are near an all-time low with the prime rate about 3.25% and the Federal Funds rate at 0.25%. This has helped to stabilize the economy since the onset of the Covid-19 pandemic in March 2020.
In normal times such aggressive polices might be thought to risk overstimulating the economy. Are there reasons to think this may or may not be a risk at present?
There are indications that they may do so 6 more times this year. If you were an outside advisor to Fed Chair Jerome Powell what advice would you give to him on interest rate increases and why?
See the following links for some useful background:
How Does the Fed Raise or Lower Interest Rates?
Key Elements of New Fed Policy Strategy
New Fed Monetary Policy
If you were an outside advisor to Fed Chair Jerome Powell what advice would you give to him on interest rate increases and why?
