Wednesday, September 16, 2015

Will they?

Source: wikimedia commons.

Will the Fed raise rates or keep them where they are (actually keep a 0.25% ceiling)?

Who knows? Tim Duy seems knowledgeable. But in our universe we put these things to a vote by a couple dozen people so the result should essentially be dominated by noise ... because nobody knows what they are doing. It's all randomness.

All I can tell you is that if rates rise, the monetary base will fall. And pretty much nothing else. The stock market might fall. But then the market might take a rate rise as confidence in the future and go up. Who knows? The markets have no idea what they are doing either.

It's all dither. We're grappling around an abstract space following entropy gradients. Excuse me, I should say it's all t√Ętonnement. It's a serious thing and we should use serious technical jargon.

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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.