In my opinion, the Federal Reserve has expected outcomes from its policies based on academic research that just don’t happen in the “real world”. For instance, taking interest rates to zero and robbing savers of interest income doesn’t incentivize them to spend more, it does the exact opposite. Not having the interest income to spend incentivizes people to save more and spend less. Is it any wonder why the U.S. savings rate has almost tripled since 2006 when the Fed’s interest rates were north of 5%?
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