HKS Affiliated Authors
Frank and Denie Weil Director of the Mossavar-Rahmani Center for Business and Government
Charles W. Eliot University Professor
Excerpt
Excerpt
Now Is Not The Time To Raise Interest Rates, Lawrence Summers, February 11, 2015, Opinion. "I cannot recall a moment when the gap between what markets expect the Federal Reserve to do and what the Fed itself has forecast it will do has been as large as it is now. Markets predict that the Fed will raise interest rates only to 1.6% by the end of 2017; the Federal Open Market Committee's average forecast is 3.5%. Such a divergence raises the risk of volatility and poses a communications challenge for the Fed. More important, it raises the question of what should guide policy going forward. Especially after Friday’s very strong employment report..." Link