Learning to Live With the Fed's Low Rates

The Federal Reserve last week decided not to hike interest rates just yet. This seems like a sensible enough decision -- labor market indicators are looking a bit weak, inflation is still a little below the Fed's 2 percent target, and Brexit and China’s slowdown are obvious macroeconomic risks. Why raise rates when economic conditions look a little subpar?

QuickTake The Fed Lifts Off
People have come up with a lot of reasons to worry about zero interest rates. At first they worried about inflation, and later about financial instability and bubbles caused by a reach for yield. But the years passed, and there was no inflation, no bubble or instability in financial markets. So people are finding new reasons to be afraid of low rates. Unfortunately, as the fears have failed to pan out, the new worries are getting pretty vague.