New Fed head approves first rate hike of 2018
The FED is going to go through the first round of raising interest rates in 2018, as more after are expected throughout the year. Wall street investors and bankers are most likely not going to be happy because this is most likely going to put the metaphorical brakes on the economy in a small way. The FED is most likely worried about the economy being over heated and going too far past the steady state. Going too far past could cause a recession or correction that would lead to a decrease in economic output and have a severe effect on the labor market. Trying to tame the business cycle is a goal of the FED because as we have seen in history, the highest economic highs are followed by the lowest economic lows.
https://www.nbcnews.com/business/economy/new-fed-head-approves-first-rate-hike-2018-n858726
2 comments:
It's a rather precautionary measure taken by the new Fed Chairman to prevent a recession. Given that the economy has been humming along rather quickly, this slight hike should prevent any economic downturn to occur. While investors and other big names do not like it because they think it will slow the growth, it's a slight step back to avoid another national economic disaster.
I am curious that FED would use what method to control the interest rate in the end. Just read an article about that they might try to increase unemployment, which is the worst way I think. Preventing the recession is important and we will see how things will go in the future.
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