This article was rather difficult to understand; however, I think I was able to grasp the main points. The article railed against the so-called "Keynesian Chorus" and their opposition to a Fed rate hike, which would lead to "tightening" (that is, making it more difficult to get a loan), on account of the Fed already having tightened too much. This is of course ridiculous because interest rates are so low that it is very easy to get them. His attack on the statistics used to enable this belief is rather difficult to understand but the general point is clear: the market is not tightened as the Keynesians claim.
He then moves on to attack the foundation of the Keynesians' argument on why interest rates should remain low; that is, the idea that low rates will encourage borrowing which will encourage spending which will stimulate aggregate demand. His claim that the actual impact of low rates has inflated the market for financial assets (such as stocks) rather than having any real impact on actual consumer spending and economic growth is logical and seems supported by the evidence. This leads to the logical conclusion that since lower rates haven't helped stimulate aggregate demand, higher rates won't hurt aggregate demand. A more interesting claim is the one that this has created a financial bubble, which the author claims is the largest of the century. My questions are as follows:
1. What would the response of a Keynesian to this defense be?
2. What other reasons might there have been for the Fed to not raise rates?
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