So, here is a solution; just keep the Fed Funds Rate pinned for years and years. Do we have a model for that? Is the US finally coming to the point where it can no longer actively fight the forces of deflation? Well, this article thinks the answer may be yes.
So it is Ben's time. Will he or won't he? And if he will, when will he?
"Steven Ricchiuto, chief economist for Mizuho Securities USA, said one option for the Fed is to put more meat on the “extended period” language in the statement.
The last FOMC statement said: “The committee continues to anticipate that economic conditions — including low rates of resource utilization and a subdued outlook for inflation over the medium run — are likely to warrant exceptionally low levels for the federal funds rate for an extended period.”
“That’s one of the tools they have talked about,” Ricchiuto said of altering language. “They have said they will hold interest rates low for an extended period, but they could hold it even longer,” he said."
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