Frozen Fed

The Federal Reserve is frozen. Its recent decision and its convoluted reasoning suggests an inability to act. Janet Yellen and her team reach for tortured justifications to substantiate further zero interest rate policy. (ZIRP) Let us revisit the mission statement of the Federal Reserve. “conduct(ing) the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates.” We are told the reasons the Federal Reserve decided not to raise interest rates are three fold. First, they believe that employment has not improved to a sufficient degree. Bernanke’s position back in June of 2013 was that 7% unemployment was a target and an indication of “substantial improvement." "Since December (2012), the Fed has said short-term rates will stay very low until the jobless rate goes below 6.5%, ..” The current unemployment...(Read Full Post)