National University System Institute for Policy Research

(858) 642-8498 Get Started

Interest rates on the rise?

EconoMeter panel looks at prospects with end to "QE3"

Roger Showley, U-T SAN DIEGO

Friday, November 7, 2014

View Article

Kelly Cunningham, National University System
Answer: NO

While interest rates should substantially rise, the Fed will not allow that to happen and will act to prevent it through another round of bond buying or other actions. The U.S. economy is now more dependent upon low interest rates and quantitative easing (QE) than ever. The Fed has created a huge bubble that will deflate without continuing to inflate it. By attempting to prevent short-term pain in recession, the problems that QE was purportedly going to solve have only gotten worse. With core problems remaining in the economy, we confront even greater challenges and longer time to correct them.