The Federal Reserve is currently holding the federal funds rate
at 5.5%. Fed Chairman Jerome Powell said, and not for the first
time, that the Fed remains committed to its 2% long-run inflation
target, which is a good thing. The Fed will undoubtedly face more
pressure to cut interest rates than to raise them, but hopefully the
Fed will hold fast. However, it is disappointing that the Federal
Open Market Committee statement does not have any warning
about the negative effects of deficit spending, for that is the
thing that makes fighting inflation all the more difficult.
Anyway, such a warning would only have the same effect
on Congress and the current president as a warning against
drug abuse with mention of its negative effects would have on
drug abusers. So, Happy New Year (sigh).
MEM
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