Jun 21, 2012

Will pushing record low interest rates even lower really make a difference?



 

Will pushing record low interest rates even lower really make a difference?


Will pushing record low interest rates even lower really make a difference in the pace of growth and hiring in the U.S.? Will it actually ease the anxiety that's being exported from Europe and polluting market sentiment?
As much as I say no, the markets, the masses, and even some FOMC members seem to think otherwise and have all but discounted some form of response from the Fed when its two-day meeting wraps up later today. But assuming it does happen, you have to factor in two things: the fact that there would be some lag time before any new policy of easing (or twisting, or whatever you want to call it) could be implemented and carried out, and the fact that it would take even longer before the knock-on effects could find their way into the broader economy.
The Fed right or wrong will  take action to mitigate risks that seem to be popping up all over but it’s just a political band aid that hasn’t before and can’t now solve our real and deep economic issues.
                           What do you think? 

3 comments:

  1. I agree. We do not have long term options that will form a secure restructure so who do we go to ?? The question is what banks (or firms) will step up to help the good people that are paying their bills and making it the way that they always have; with hard work and dedication. Also, big investments are contstantly at risk by conflict. Civillian, Military, what have you. Where can we keep our money??

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  2. Unfortunately, by keeping interest rates low, the FED has dis incentivized people from investing and thus most people are forced to be in cash. With inflation low that is ok but as I suspect when inflation hits from the effects of the FED continuing to print money, people will be forced to make speculative investments ( e.g. buy Facebook IPO shares…. ) they can ill afford to make. The FED has set up a system that hard working people like yourself continually get screwed as you are paying for the bail outs of the TOO BIG TO FAIL THEORY!

    Best,

    Larry Goldfarb

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  3. Absolutely Larry. I was well off and lost so much. At this time I am putting my trust in people that are not delivering due to unforeseen circumstances. These circumstances are not their fault at all but a by-product of what our society has succumbed to in order to keep an already unstable balance in our legal systems. I have lost all faith in the good Ol' fashioned handshake way of business. I am not speaking of the person(s) but the way our current system has a downed affect on economic growth. This affect goes right down to the individual. We are on the same page my friend. I enjoy your blog posts.

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