by Brian Domitrovic
Last year, the Federal Reserve finally showed some restraint. It raised an interest rate and tied off “quantitative easing,” the big buying of Wall Street’s housing-market paper which former Fed chair Ben Bernanke had been so fond of. The initial results came in a little harrowing. Stocks dived and the hiring of full-time workers across the economy fell well below norms.
After six years of paltry 2% national economic growth since the trough of the Great Recession in 2009, it appeared, in 2015 and early 2016, that the Fed had to concede semi-stagnation. The monetary blowouts of the previous years had done nothing to prompt real economic expansion. Now it was time for the Fed to make small moves in the opposite direction, to ward off the danger that Bernanke’s actions had always been courting: