, Columnist
The Fed’s Stimulus Might Be Undermining Growth
What if low interest rates are bad for productivity?
Could low interest rates lead to this?
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The U.S. Federal Reserve faces myriad challenges in deciding where to set interest rates. In addition to its mandate to balance unemployment and inflation, it must consider financial stability, Congress’s spending decisions and, lately, maybe even whether it is enabling President Donald Trump to engage in a damaging trade war.
Add another concern to the list: If the central bank lowers rates to head off a recession, it might actually undermine the productivity needed to raise living standards in the longer term.