This week’s Federal Open Market Committee meeting was months in the making, with economists expecting as far back as January that by now the federal funds target rate here in the USA would move up from its current 0-0.25% rock bottom level. The rate was taken down from 5.25% to zero in a very short time, to combat the world-wide 2008 financial crisis. So here we are, seven years later and it is still right there at zero. There is almost no inflation in the USA (at least officially). Low inflation is not good in some respects; it means the economy is not very robust (providers cannot charge more for goods and services, and workers don’t get pay raises). The other numbers are also mixed. Unemployment is down to 5.1% but the labor force’s participation rate is relatively low. Check out this great graphic from Bloomberg Business magazine.
