The first thing to clarify is what an interest rate is not.
As the Mercatus Center’s Scott Sumner often says, one ought never to reason from a price change. Interest rates, like other prices, can change for all sorts of reasons; the implications of the change generally depend on the particular reason for such a change.
Here are some thoughts on the implications of Donald Trump assuming the presidency with respect to monetary policy.
Are interest rates not prices? And if so, should they not be discovered instead of imposed?
The Federal Reserve has been in the news a lot lately because of its attempts at conducting monetary policy in the wake of the 2008 financial crisis. In December of 2015 the Fed’s policy-making body, the Federal Open Market Committee, voted for the first time in 7 years to raise the interest rate on bank […]