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Federal Reserve Does What Is Expected

This article was written by in Economy. 2 comments.


The Federal Reserve bumped up the short-term rate target to 4.25%, while hinting the increases may come to an end at some point. This activity practiced by the Federal Reserve Board at their meetings is a very strange ritual. If you think about what they do, you may come to the conclusion it’s more like a medieval religious activity.

The Feds declare a target rate to be higher or lower than the rate on the previous day. Smart people debate whether this activity has a calculable long-term effect on the economy. Along with the decree, the Fed professes a statement, a coded prophecy of sorts, which sends a message to the believers about the future that is in store for them. The statement worded loosely enough that if an outcome is different than expected, it still agrees with the prophecy.

Published or updated December 13, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

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avatar Matt Hartrich - Buffalo, NY

The real question is whether they will stop raising rates.

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