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Janet Yellen Fights the Tide of Falling Interest

Janet Yellen Fights the Tide of Falling Interest

by Keith Weiner

 

On Wednesday Dec 16, Federal Reserve Chair Janet Yellen announced that the Fed was raising the federal funds rate by 25 basis points.

Let’s get one thing out of the way. This is not a move towards free markets. Whether the Fed sets interest lower, or whether it sets interest higher, we still have central planning. We still have price fixing of interest rates.

The Fed Never Solved The Mystery Of The "Missing Inflation", And Now It Has A Big Problem

Back in June, this website first "solved" the "mystery" behind America's missing inflation, when we showed that a record number of US renters are unable to afford housing, suggesting that record amounts of "disposable income" were being diverted for use as a shelter "tax" instead of being spent on true discretionary goods and services, leading (together with the Obamacare tax) to the broad and distressing decline in not only traditional retail sales and moribund consumer spending, and the "secular" economic slowdown observed over the past several years.

The Fed's premature rate hike

The prospect of higher interest rates in the United States and economic weakness elsewhere has caused the dollar to rise against most other currencies. This makes our goods and services less competitive in the world economy. The Fed should be much more concerned about the economy's continuing weakness than the prospect its strength will lead to spiraling inflation.

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