Can it be happening again? Just a few years after badly missing the sub-prime bubble, is the Federal Reserve setting us up for another doozy of a crisis? By slashing short-term rates to historic lows six years ago and promising to keep them low for quite some time, the Fed appears to be ignorant of the futility of such a policy to spur economic growth and of the significant inflationary risks that it carries. Easing rates during the financial panic in 2008 was the right move in stopping the economy from plunging over a cliff. By late 2010, however, the recovery was already under way and the unemployment rate was falling, but the Fed kept the federal funds rate just above zero.
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