The Federal Reserve this week raised the Federal Funds Rate a quarter point to 1.25 percent, bringing the rate to the highest it’s been in eight years. One might now say monetary policy has progressed from a policy of “ultra low” rates to simply a policy of low rates.
How this will play out over time continues to depend quite a bit on how much the Fed shrinks its balance sheet and how soon a recession descends on the economy.
Not surprisingly, then, many continue to discuss the best ways to reform the Federal Reserve. But, there’s definitely a wrong way to do this.
This post was published at Ludwig von Mises Institute on June 17, 2017.