More Criticism for Fed’s Inflationary Rate Cuts

In the Wall Street Journal today, Stanford’s Ronald McKinnon argues against the Federal Reserve’s policy of cutting interest rates to almost nothing, and debasing our currency, in a short-term effort to pump up consumer spending by favoring debtors. Instead, he argues, “there is a strong case for raising the fed funds rate as much as is necessary to strengthen the dollar in the foreign exchanges” to prevent the flight of capital abroad.

International investors have denounced the Fed’s easy money policy more pungently, saying it will prove very costly to America in the long run. Julius Baer, a Swiss Bank that made plenty of money for its American investors over the last several years, observed that “the Fed has shirked many of its responsibilities: by allowing asset bubbles to form unfettered; by maintaining ultra-lax monetary policies; . . . and, by succumbing easily to the faintest political pressure,” signs of what it called “The Age of Decadence” in its 2007 Annual Report.

04/25/2008 @ 1:38 pm | Odds & Ends | Comments

3 Responses to “More Criticism for Fed’s Inflationary Rate Cuts”

Posted by: Fed Cuts Interest Rates, Triggering More Inflationary Pressures | OpenMarket.org - 04/30/2008

[...] the economy) as pushing on a string. But it will trigger renewed inflationary pressures. International investors are already disgusted with the Fed’s inflationary attempts to bail ou… by chopping interest rates, and this will make them even more reluctant to invest in the U.S. [...]
Posted by: Emad Siddiquee - 06/04/2008

Sir,
I would like to request you that, Please send me the criticism of Open market economy in details and also included by the point.

It is very much helpful for me if you send me my required data as soon as possible.

Emad siddiquee.
Posted by: Fed’s Inflationary Easy-Money Policy Hammered | OpenMarket.org - 06/05/2008

[...] global economic influence since the 1970s.” The Fed’s policy has also been condemned by international investors and economists, like investment bank Julius Baer, which criticized the Fed for spawning an “Age of [...]