Trump Administration in 2017: First the tax cuts, then the rate hikes. @Larry_Kudlow. Ed Lazear, @HooverInst. @BrettArends, @Marketwatch.

Aug 10, 2016, 02:57 AM

08-09-2016 (Photo: The press conference of Federal Reserve Chairperson Janet Yellen appears on a television screen on the floor of NYSE ) http://JohnBatchelorShow.com/contact http://JohnBatchelorShow.com/schedules http://johnbatchelorshow.com/blog Twitter: @BatchelorShow

Trump Administration in 2017: First the tax cuts, then the rate hikes. @Larry_Kudlow. Ed Lazear, @HooverInst. @BrettArends, @Marketwatch.

Yet the Fed’s unwillingness to raise rates can be explained, if not defended. If this is a peak, it is too low a summit. Growth rates have fallen short of the prerecession average and cannot make up for lost ground. Further, the labor market has not returned to full strength: The employment rate, which reports the ratio of those with jobs to those in the working-age population, was 63.4% in December 2006 but now stands at only 59.6%. Some of this difference reflects an increasing numbers of retirees. But the rate for those of prime working age, 25 to 54, is also 2 percentage points below prerecession highs. Additionally, the hiring rate during this recovery never reached the 4% peak attained in 2006, during the previous boom. Each time it appears appropriate to raise rates, some new shock hits the world economy, Brexit being the most recent example. Fundamentally, the Fed fears a repeat of 1938, when a recovering economy was sent into a second strong contraction as a result of central-bank tightening. Still, interest-rate increases are overdue. If this is the peak of a business cycle, or close to it, rates should have gone up long ago. The Fed has already waited too long to move back to a more normal posture, one that would permit aggressive monetary policy when it is next needed. Now the Fed’s position must be better late than never—hoping that the costs of poor timing will be small.

http://www.wsj.com/articles/the-fed-missed-its-chance-now-what-1469141666