It is one thing to slow inflation - if there is really inflation - for a short period of time. However we are now 15+ years into this as a means of encouraging economic growth, not controlling inflation. Back in the dot.com days when the economy was expanding, these artificial Fed stimulants should have been removed.
Now that the economy has gone into total stagnation, removing them now and letting Fed interest rates rise back from 0% to traditional 4%'s will certainly kill the economy deader than a door nail.
Imagine your typical low informed voter dealing with a 400% increase in borowing rates? Joe Dumb Voter does not recall anything but zero Fed rates (most are not old enough).Political suicide.
The Fed has painted itself into a horrible corner.
“removing them now and letting Fed interest rates rise back from 0% to traditional 4%’s will certainly kill the economy deader than a door nail.”
The problem is that this rate is artificial. Lending will always occur when the terms of the loan are beneficial to the lender - meaning that the interest rate has to compensate for lender risk.
Keeping the rate lower than the risk incurred - simply results in no lending at all - pumping up deflation. What happens in deflation? The money that you do have is worth more every month. This article is basically admitting that deflation is king right now.
Deflation for the foreseeable future is the only result of Fed policies. This is why the money velocity is so low.