Interest rates should be determined by the market.
A growing economy requires growth in the money supply for obvious reasons. Should interest rates be manipulated higher than what the market would charge, they will slow down economic growth.
Re: Interest rates should be determined by the market.
I agree.
Re: Should interest rates be manipulated higher than what the market would charge, they will slow down economic growth.
I agree.
But - if they are manipulated lower than their market value, they will cause inflation.
The Federal Funds Rate has averaged about 2.2% for the last 12 months.
The inflation rate for the last 12 months was 1.7%.
The July inflation rate showed we are moving toward a 2.1% rate.