If Einstein Ran the Fed, Rates Would Rise

If Einstein Ran the Fed, Rates Would Rise

Try this thought experiment. Instead of leaving borrowing costs on hold at 0.25 percent when it met Thursday, suppose the Federal Reserve had instead raised its key interest rate to 3.25 percent. That, after all, was the average from 2004 to 2008, back when the economy was deemed to be normal. So if monetary policy normalization is the goal, maybe the U.S. central bank should get it over with in a single move and see what happens.

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