This came out last November 26. Is there anybody—anybody—who now thinks that the Federal Reserve would be better prepared for the future and that the economic future would be brighter had the Fed taken Marty's advice and raised interest rates further faster? Anybody? Anyone? Bueller?: Martin Feldstein: Raise Rates Today to Fight a Recession Tomorrow: "A downturn is inevitable as asset prices fall. The Fed can prepare by continuing to raise rates now...
...It is in the interest of the next recovery, I believe, that the Fed will continue its steady rate increases.... History does suggest that the current very low unemployment rate will cause inflation to rise.... As I have argued in these pages since 2013, the Fed should have begun raising the fed-funds rate several years earlier. Doing so would have prevented the recent sharp increases in the prices of equities and other assets, which will collapse when long-term interest rates rise. Declining asset prices could destroy a substantial amount of household wealth and push the economy into recession. Unfortunately it is not possible to turn back the clock and prevent the overvaluation of assets and the resulting risk of recession. But I believe that the Fed is raising rates today so that it will be in a better position to offset a future economic decline.... Though it would have been better for the Fed to start raising rates earlier, the Fed is right to increase the short-term rate now so that it will have as much ammunition as possible when the next downturn comes...
#shouldread
