CNBC: Higher interest rates would be good for the country, Treasury Secretary Yellen says
* The former Federal Reserve chair said the president’s plans would total about $400 billion each year — a level of spending she argued was not enough to create an inflation over-run.
* “If we ended up with a slightly higher interest rate environment it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen told Bloomberg.
U.S. Treasury Secretary Janet Yellen said that President Joe Biden’s $4 trillion spending proposal would be positive for the country, even if it leads to a rise in interest rates.
During an interview with Bloomberg News, the former Federal Reserve chair said the president’s plans would total about $400 billion each year — a level of spending she argued was not enough to create an inflation over-run.
“If we ended up with a slightly higher interest rate environment it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen told Bloomberg.
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Update #1: Yellen says higher interest rates would be a 'plus' (The Hill)
Update #2: Yellen says higher interest rates would be 'plus' for U.S., Fed- Bloomberg News (Reuters)
WNU Editor: It is hard to believe that U.S. Treasury Secretary Janet Yellen is saying what she is saying. Higher U.S. interest rates will crash the stock market, burst the housing bubble, and make credit unaffordable for most people and businesses. If this is good for the country, I hate to know what will be bad.
But this is the message that the US Treasury is sending out, and with the US Federal Reserve now laying the ground work for tapering of fed asset purchases, it is a guarantee that interest rates will be going up.
What does this mean for everyone?
It means that for many who are dependent on debt, it is going to be painful times. Correction. Very painful times. And pressure on the US government from the public to do something will be enormous.
Will this coming crisis result in new government policies and institutions (i.e. digital currencies)?. We shall see. But I see a lot of changes happening in the next two to three years.
2 comments:
Wrong. Living with easy monetary policy is not the norm. We’ve been here a long time but it’s not the norm not good for the economy.
Higher interest rates are desirable WNU. Encourages savings rather than profligate spending. No mystery why the US government increased federal debt by about 25 trillion since early 2000’s. Near zero interest rate. Get federal long bond interest rates back to historic norms of 4% and borrowing will subside in a drastic way.
A economic panic will follow with all the assets propped up by ZIRP coming down. Housing, stocks, banks, green energy will all crash.
Not a bad thing and long overdue.
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