Paul Krugman worries that the reason why the Fed hiked by a quarter point in December 2015, and won’t immediately reverse course, is that their judgement has been impaired by talking to too many who work in banking, which industry suffers from very low interest rates.
As Paul noted in one of his earlier blogs, there are those on the right of the Fed who think that rates are so low, and quantitative easing was undertaken, as part of a liberal conspiracy to help Obama; or, to impoverish those who live off savings.
If I was on the FOMC, I’d probably feel comfortable that there were conspiracists accusing me of having been corrupted by interest groups on opposing sides.
Addressing PK’s most recent charge, his worry seems pretty unlikely to me. The FOMC had no problem dropping interest rates like a stone – from 5.5%, to 0.25% – when the…
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