Photo by Dan Smith, License: CC by 2.5
Note: If you want to gain a basic grounding into government policy and its effects on currency, please read my previous article on the aforementioned subject.
Within the sphere of economics and economic thought, the discussion which has overwhelmingly prevailed, above others, is that of whether the Federal Reserve, the central bank of the United States, should raise interest rates or not. At the current moment, the tide seems to have shifted towards a tightening of rates, however, the opposition towards an interest rate rise is still unyielding. Economic scholars, who believe that an interest rate hike is the right way to go, assert that the hike will boost job growth through an increase in both opportunity and actual cost of automation, and that it will boost consumer spending, according to the Keynesian model. However, proponents of keeping rates stable argue that a hike would send financial markets into turmoil, perhaps even worse than their late August plunge. Funnily enough, the one minim that both sides agree on is that whatever happens, a Fed rate hike would change the global economic landscape forever. However, in this article, the case for raising interest rates will be argued, as that is precisely what I firmly agree should happen. Continue reading “Should the Federal Reserve raise interest rates?”