On August 8, 2006, in General, by Neil Stevens

The Fed’s been creeping up its interest rate by a quarter point (25 basis points) after every meeting of its Open Market commitee with regularity for some time. But at last, the Fed has stopped, and decided to leave things where they are a 5.25%.

It’s a tricky decision, and they really could have gone either way. On one hand, rising oil prices are pushing inflation to higher levels than we’ve seen in quite some time, as seen in recent CPI hikes. On the other hand, rising oil prices are threatening our prosperity, as seen in recently disappointing employment growth rates.

Some people wish that Fed Chairman Bernanke would push us right into a recession in order to whip inflation, but I’m glad he won’t. Let the oil shock run its course first, I say, so our economy doesn’t have to suffer both pressures at once.


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