by Graham Summers
Yesterday the Fed failed to raise rates… again.
It’s pretty incredible if you step back and think about it. Here were are, seven years into a supposed recovery, and the Fed’s actions tell us the economy cannot handle rates higher than 0.5% (the overnight benchmark rate fluctuates between 0.25% and 0.5%).
Rates of 0.5% (and lower) and the word “recovery” do not belong together. The Fed is currently maintaining rates at levels usually reserved for dealing with Crises, NOT recoveries. Heck, the Fed kept rates higher than current levels during the recession following the TECH BUST.
Put another way, seven years into this “recovery” the Fed views the economy as weaker than it was after the Tech Bubble burst in 2002.