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Janet Yellen is wrong that low Fed rates raise recession risks and she knows it
Federal Reserve Chair Janet Yellen told Congress this week the central bank could cause a recession if it waits too long to raise interest rates. Wait, what? Isn't it the other way around? Yes, according to Janet Yellen's testimony just a year earlier. In the past, Yellen and her predecessor, Ben Bernanke, have emphasized that, because interest rates are still near zero and inflation has remained persistently below the Fed's 2% target, it is safer for policymakers to err on the side of leaving borrowing costs low for longer. "The federal funds rate is still near its effective lower bound. If inflation were to ... (full story)
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