- Created: Monday, 07 December 2015 22:40
- Written by Steve Palmer
According to the mythology of capitalist economics, adjusting interest rates and the money supply can enable capitalist economies to negotiate their way successfully between maintaining full employment, ensuring a stable currency and controlling inflation. This is precisely the charter of the US Federal Reserve Bank, the US central bank. For the last seven years, the Fed has feverishly printed dollars, while keeping interest rates near zero, attempting to revive the US economy. Last December, with the US economy supposedly recovering, the Fed started talking about the need to ‘normalise’ monetary policy. Ever since, capitalist markets, companies and commentators have been asking: will they raise interest rates or won’t they? Now it finally seems likely that the Federal Open Market Committee will go ahead and raise rates at its meeting on 15-16 December 2015. Why should this tinkering with the capitalist economy be of any interest to us?