Adam Brandon and John Tamny:
“At this point, a couple more interest rate increases are necessary to stabilize growth at a sustainable pace and stabilize the labor market so it doesn’t overheat.” Those are the words of former Federal Reserve Chairman Janet Yellen. Interviewed at a recent investor conference in Washington, D.C., Ms. Yellen’s rather explicit point was that economic growth has to be restrained so that inflation can remain in check. And central bankers wonder why they’re so unpopular.
While the Fed’s ability to regulate the price of credit through its funds rate is well overstated, it’s passing strange that influential people would make putting people out of work a policy goal. Yet that’s exactly what the retired central banker is proposing.