Economic Medicine

SEARCH BLOG: FEDERAL RESERVE

The Federal Reserve has been pretty quiet for awhile with regard to interest rates. Right now, there is no rational reason to believe that the Board would raise rates further.

• The economy is in a lull... maybe sliding slightly.
  
• The housing markets have tanked and home prices dropped drastically in some areas.
  
• There is no shortage of workers and, if that should happen, Mexico is prepared to fill the need.
• Oil, as a commodity, has not increased or changed much recently (although gas prices have increased due to restrictions on building new refineries).

So, all of the recent talk on Wall Street about the Federal Reserve raising rates is:

• Irrational because there is no economic driver for that
• Irrational because the Federal Reserve would be acting irrationally

Still, given the fragile state of affairs in this state... Michigan... any action to increase interest rates would signal economic disaster here. I guess Gov. Granholm could discuss that with Ben Bernanke.

..