Morning Must Look-At: Nick Bunker: The Case for Inaction on Interest Rates

The case for inaction on interest rates Washington Center for Equitable Growth

Nick Bunker: The Case for Inaction on Interest Rates: “Equitable Growth’s Ben Zipperer…

[argued] average wage growth should be at least 3.5 percent a year…. Wen does wage growth cross above this threshold?… Not until the employment rate for workers ages 25 to 54 crosses 79 percent…. As of January 2015, this prime-age employment to population ratio was 77.2 percent. The ratio has been on the rise, but it still has a ways to go before it hits 79 percent. Growing at its current rate, that rate won’t hit 79 percent until 2017 at the earliest…. With inflation below its target, worries about stalled or slowing economic growth abroad, a strengthening dollar, and an incomplete labor market recovery, the Federal Open Markets Committee should consider the consequences of raising interest rates too soon. Perhaps the best move is to do nothing and simply wait…

February 23, 2015

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