Memo to the Fed: Pace Rate Hikes Carefully
In June 2004, Alan Greenspan—remember him?—raised the fed funds rate target from 1% to 1.25%. As BusinessWeek wrote at the time, the then-Federal Reserve chief's aim was to "gently wean the economy and the financial markets off their dependence on cheap money." One big worry: The danger that "an overly rapid increase in rates could puncture the housing bubble, causing a sharp decline in housing prices."
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