Worth noting that the mainstream macroeconomic wisdom has been completely disconnected from what we've observed in reality the past 10 years or so -- having rates this low for this long is supposed to spur demand and create inflation, according to mainstream macro, right?
Re:Fed Ends Zero-Rate Era
by shawn-furyan on Wednesday December 16, 2015 @05:19PM
(#10747801)
I think mainstream macro acknowledges that negative rates can be needed to spur demand even though there isn't a good mechanism for achieving negative rates. The zero bound is pretty much a 'natural' restriction that doesn't have anything to do with just how much people want to hang on to their capital in times of uncertainty.
low rates have spurred demand and inflation RELATIVE to where they would have been at much higher rates.
Re:Fed Ends Zero-Rate Era
by auntienomen on Wednesday December 16, 2015 @03:26PM
(#10747048)
Given high demand, yes. But demand hasn't been high.
As to your second point, we will have to agree to disagree. You might be right, I'm not a macro economist, but your opinion is a minority one and its definitely not the mainstream opinion.
Which is fine, it might be right, but I'd rather have the fed have room to cut rates than not have that option on the table.