/biz/ - Business & Finance

>>15007440
you don't have to raise rates until you cause a recession. It's the fed's job to raise rates during the good times to moderate growth rate to a sustainable level. Raise rates a little bit at a time so you have say, 2.5% growth in the economy instead of 3% growth.

Raising interest rates (I think the actual name is the "federal funds rate") constricts the money supply and increases the value of the dollar. It helps limit inflation. It also makes money "more expensive" because borrowers have to pay a higher interest rate on their loans. This means people&companies have to make more sensible choices about what they borrow money for.
When money is "cheap" aka low interest rates, people&companies borrow money to make all kinds of stupid choices because there are no high interest "consequences" to borrowing the money.

>>15007687
yeah we'll see what happens. I think the important part is to keep an eye on things so you're not surprised when it happens and to diversify your assets