Monday, August 05, 2024

A possible way out of the dilemma between inflation and recession.

It's hard for the Federal Reserve to determine what the best interest rate is between spurring inflation or spurring recession. It's a "one size fits all" problem.

One problem is that asset values, such as real estate and stocks, are too high so the rest of the economy struggles to maintain these values; for instance high rents.

Maybe they should have two interest rates. One set higher to cool inflationary speculation on existing assets and the other set lower for creating new assets; such as new housing construction.

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