Tags: Federal Reserve | rates | economic | growth

NY Post's Trugman: How Can Fed Raise Rates Without Economic Growth?

By    |   Monday, 30 March 2015 08:29 AM


In light of the fact that U.S. economic growth totaled only 2.2 percent in the fourth quarter, New York Post reporter Jonathon Trugman borrowed from rock and roll to describe the plight of the Federal Reserve.

"To rework a line from Pink Floyd’s 'The Wall,' 'If you don’t grow yer economy, you can’t have any rate rise. How can you have any rate rise if you don’t grow yer economy?'" he writes.

"That’s the wall Fed Chairwoman Janet Yellen faces in raising rates in 2015."

Yellen said in a speech Friday that the Fed is likely to begin raising interest rates later this year and will go slowly once it does move.

Many economists expect the Fed to start in September. The central bank has kept its federal funds target rate at a record low of zero to 0.25 percent since December 2008.

The economy grew 2.4 percent last year, marking the sixth straight year of growth below 3 percent. Some economists expect continued slow growth this year.

Others share Trugman's concern about the economy. "The consumer really hasn't kicked in at full speed ahead," Peter Cardillo, chief market economist at Rockwell Global Capital, told CNNMoney."We're going through a soft patch."

Retail sales fell 0.6 percent in February, the third straight monthly decline.

But not everyone is worried about the economy. Take MarketWatch columnist Rex Nutting, for example.

"In an economy as complex as ours, something or other is constantly happening to speed up or slow the sales of goods and services," he writes. "In the first quarter, we got a storm of bad news, but it’s not likely to last because the economy has a lot of forward momentum."

So what's going to pull the economy higher?
  • "Spring," Nutting says. "Some, but not all, of the weakness in the economy was simply a result of the cold weather. The only way to fix that is to have warmer weather."
  • The consumer sector. So far consumers appear to have held back from spending the money they've saved from the 31 percent drop in gasoline prices over the last year. But eventually that should change, Nutting notes.
Related Stories:




© 2020 Newsmax Finance. All rights reserved.


   
1Like our page
2Share
StreetTalk
In light of the fact that U.S. economic growth totaled only 2.2 percent in the fourth quarter, New York Post reporter Jonathon Trugman borrowed from rock and roll to describe the plight of the Federal Reserve.
Federal Reserve, rates, economic, growth
387
2015-29-30
Monday, 30 March 2015 08:29 AM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved