Blog with MAE Capital

Well the economy is not doing so well, so traditionally interest rates have been raised to ward off inflation.  With the economy and the demand for goods and services down, traditionally this would be a good sign that interest rates would remain low.

This is a little different in that we (the US) have been the super power that drives all economies and that is shifting, and the dollar is losing its strength against other currencies.  With a weakening dollar this too will create inflation, but the question would be; would raising interest rates stop this inflation???  My guess is, no it would further stagnate the economy because the people would not have created a demand for good and services, thus we have to take a wait and see attitude on rates.  For now they are the lowest they have ever been so take advantage of them now.

Ask me or tell me what you think.