Dec 11, 2014

Krugman seem the writing on the wall but don't raise the rates yet....

The jobs numbers have been really good the past month and so there is has been a renewed push to start raising interest rates. The Fed says that perhaps, just perhaps, they will start to look at doing that. Krugman says whoa! let's not get ahead of ourselves -- the facts on the ground do show some improvement but the risks of raising rates are not worth it. If rates are raised too early then the economy could fall back into the doldrums like in Europe and Japan. Cheaper money is still needed for the foreseeable future. If inflation does come back then the Feb can always use the tools at its disposable to ramp things down.