When The Fed Hikes Rates, It Harms Weaker Economies

Once again the Federal Reserve Board has raised the federal funds rate in an effort to cool off the U.S. economy in fear of an inflation that nobody is able to detect ("Who'd catch pneumonia if the U.S. sneezes," American News, May 22). The recent increases in the consumer price index (CPI) and producer price index (PPI) were caused by relative price accommodations within the economy, due to a much-needed oil price raise.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.