There is a ton of savings though, which is why savings rates are down, so there is liquidity available but no one is borrowing it and nobody is spending because of the job situation.
Why aren’t people using their savings to stop their foreclosure?
There is no liquidity in the marketplace. Small businesses can’t get loans. Consumers can’t get credit cards. Banks are not lending.
How do you raise rates into this environment.
Is there a ton of savings, or has there been an increase in the savings rate? I believe (although I'm no expert) it's the latter and not the former.
I think liquidity has been and continues to be problematic, not just for the economy, but for the consumer as well. Like I said, I could be wrong.
Sometime when you raise a rate like this (think home buyers that have been waiting to buy)you spur borrowing as people decide to act before they go higher. In essence you’re flushing out the buyers. We shall see if they’re out there.