{"id":365574,"date":"2018-06-15T22:21:38","date_gmt":"2018-06-15T21:21:38","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/actually-nyt-hurting-growth-is-the-whole-point-of-raising-interest-rates\/"},"modified":"2018-06-15T22:21:38","modified_gmt":"2018-06-15T21:21:38","slug":"actually-nyt-hurting-growth-is-the-whole-point-of-raising-interest-rates","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/actually-nyt-hurting-growth-is-the-whole-point-of-raising-interest-rates\/","title":{"rendered":"Actually, NYT, Hurting Growth Is the Whole Point of Raising Interest Rates"},"content":{"rendered":"
\"Federal<\/p>\n

Federal Reserve Building (cc photo: Dan Smith\/Wikimedia<\/strong>)<\/em><\/p>\n<\/div>\n

The Federal Reserve Board raised interest rates on Wednesday. According to comments from Chair Jerome Powell and other Fed board members, they believe that the unemployment rate is approaching, if not below, levels where it could trigger inflation. The hike this week, along with prior hikes and projected future hikes, was done with the intention of keeping the unemployment rate from getting so low that inflation would start to spiral upward.<\/p>\n

This is not the same as “express[ing] confidence that raising borrowing costs now won\u2019t hurt growth,” which is the view attributed to Fed officials in the New York Times<\/strong>‘ “Thursday Briefing” section (6\/14\/18<\/a>). The point of raising interest rates is to slow growth, so they absolutely believe that higher interest rates will hurt growth. The point is that the Fed wants to slow growth, because it is worried that more rapid growth\u2014and the resulting further decline in unemployment\u2014will trigger inflation.<\/p>\n

Chair Powell did say<\/a> that he didn’t expect higher borrowing costs to choke off growth, but that is not the same as saying that he doesn’t believe it will slow growth.<\/p>\n

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Dean Baker is a senior economist at the Center for Economic and Policy Research in Washington, DC. A version of this post originally appeared on CEPR\u2019s blog Beat the Press<\/strong> (6\/14\/18<\/a>).<\/em><\/p>\n

You can send a message to the New York Times<\/strong> at letters@nytimes.com<\/a> (Twitter<\/strong>:@NYTimes<\/a>). Please remember that respectful communication is the most effective.<\/em><\/p>\n

hat tip: Robert Salzberg<\/em><\/p>\n

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