re: Does the Federal Reserve have objective tools to raise and lower rates?

Taylor Rule/Taylor Principle, and the ever vague, "economists dashboard".

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Taylor Rule/Taylor Principle

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If the Federal Reserve follows this, I believe it lends more credibility and transparency to the institution.

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and the ever vague, "economists dashboard".

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So it's the Taylor Rule and...and whatever they decide to do.

I have a feeling this thread was not looking for the actual answer

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The last thing the Fed wants is debt paid off. Debt is how they enslave countries and control them.

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Could you please explain how the Fed keeps countries in debt? Thanks.

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If the Federal Reserve follows this, I believe it lends more credibility and transparency to the institution.

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True, but you get modified Taylor Rules, and arguments about the coefficient in front of the inflation and employment portion. Should it be 50/50? Why should employment be a mandate of the federal reserve to begin with?

I agree that there should be some fixed guideline, but the more control the government has, the worse things seem to be.

The current "Taylor Rule Prescription", according to the Atlanta Fed, would be over 4%.

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Over the last 12 months the CPI has risen 2.5%. Most of that rise was due to energy prices. Energy prices have been decreasing with pressure from additional oil supply and adjustments due to seasonal changes.

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I think CPI is antiquated. I'm not sure what would be a great replacement, but it just feels incomplete.

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Could you please explain how the Fed keeps countries in debt?

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Russian is right here. However they are compelled to keep rates low because of the massive debt loads the politicians have handed us. They can't raise rates because we wouldn't be able to sustain the levels of government spending with the interest charges we would be paying. We're paying $330billion right now

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Will the decrease in energy be enough to offset the Fed from raising rates in the near term?

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My guess is the Fed will raise the overnight Fed funds target rate by another .25% when the FOMC meets next week.

If Pres Trump hadn't gone all Ninja-Ratemeister on the Fed the last month or so I personally believe the Fed would NOT have raised rates this month.

But now they almost have to raise rates so as not to look like they bowed to his political pressure. (And maybe they won't raise rates and not care who thinks they bowed to political pressure.)

My hope is the Fed will include wording in their press release following their decision to raise rates that says something to the effect of "we believe we have now achieved a rate-neutral environment for the foreseeable future."

That would be the indication the Fed will be slow to raise rates in the future thereby giving itself time to assess the economic slowdown almost everyone is now predicting, including the 2-year to 5-year yield curve.

The stock market will react positively to that wording.........for a day or so.

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I guess he was just lucky or it was blatant politics?

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I wouldn’t exactly call Obama lucky for inheriting the worst economic situation since the Great Depression

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Could you please explain how the Fed keeps countries in debt? Thanks.


It starts with charging countries interest to print their own money.

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How does the Fed do that? For example, how does the Fed charge Britain interest for printing the British pound? Thanks.

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Then, fractional reserve lending allows banks to lend money

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Reserve for what?