FA Center: Tug-of-war debate over interest rates has to include taxes, inflation

Interest rates today are neither too high nor too low. Like Goldilocks, you might even say they are “just right.”

This certainly puts in a different light the intense debate currently about whether the Federal Reserve will raise rates, lower them, or keep them the same. Many insist that interest rates are at historically low levels and need to be raised, not only to tamp down any inflationary pressures but also to restore the Fed’s firepower so that it can respond forcefully when the next economic downturn occurs.

On the other hand are those who — like President Donald Trump— believe rates are already so high, they will cause that same economic downturn, and therefore need to be cut ASAP.

>>> Original Source <<<