The Fed met today, and for the first time in a year, they did not raise the interest rates. I think this is a smart move by the Fed. This shows that they are confident in our economy and the steady, consistent growth it has shown in the past few years. It is unprecedented that our economy has survived the most gruesome terrorist attack in American History, record oil prices, and a housing bubble that swelled up to the size of a hot air balloon and popped faster than you could say, “Do you want to buy my house?”. Much of this has to do with the Bush tax cuts that were put into effect in 2003. The tax revenue has been up, more jobs created, and more disposable income for consumers to save and spend.
The Fed was making a statement that the housing market is at the end of its drop. They are also not too worried about credit card problems and inflation. I think they need to take a closer look at what credit cards are doing to people. It would be worse for them to hike up the rates, because then people would really be reeling in a swamp of credit card debt with astronomical interest rates. You know my take on credit cards. I don’t think their a tool, I think they destroy more check books than they help them. The problem is that we are not disciplined enough to allow five companies to extend thousands of dollars of unsecured debt all at once. The government has not addressed the issue of credit card debt in America, but they will once it starts adversely affecting the economy, and this is only a matter of time.
What do you think? Do you think it was smart for the Fed to keep the interest rates steady for now? Post a comment with your thoughts.