[Antony Davies, James R. Harrigan] Fed’s near-zero rates can’t last forever
ViewpointsSept 30, 2016
The Federal Reserve has held interest rates at near zero for so long that many have forgotten that near-zero rates are not normal. And when we finally do return to normal, there’s going to be a very large bill to pay.To help hold interest rates so low for so long, the Fed has increased bank reserve balances by 20,000 percent over the past decade, flooding financial institutions with enough reserves that borrowing money, literally, costs almost nothing. The Fed’s target interest rate, the federal