With so much talk about raising or not raising - most people completely forget another much more important topic related to the Fed: the fact that it does not deserve to exist and should be abolished. It does not provide any benefit to the economy, and its policy and activities are major impediments to healthy economy and functional and fair financial markets.
It's always easier to win hearts and minds if you provide a modicum of explanation as to why your position is correct. Some quantitative backing of your arguments also helps. It turns out that "Because I said so" is actually a shockingly ineffective method of persuasion.
So, to be clear, hiking a tiny 25bps from the zero bound would actually risk putting us into a recession after 7 years and $4 billion of printing, with stock markets at all-time highs, and interest rates at all-time lows? You still think emergency conditions like 2009 are warranted? What part of the economy is going to take a hit from the massive quarter point move, again? As for the second part, you are assuming that savers, for example, seniors relying on fixed income payments care that interest rates are 8%.
BTW, Stating that inflation in the US now or has been at any time in the past few years is 2% is insulting everyone's intelligence.
So you claim that the dozen or so independent public and private sources that calculated inflation between 1.5% and 2% every year using reams of quantatative data since 2012 are all in collusion and wrong in the same direction and amount? Again simply because you say so? Definitely winning people over with that devastating show of logic! Thanks for making my earlier prediction true that someone would come out of the woodwork claiming we're in some vast conspiracy hiding the hyperinflation they just know is going on. So predictable.
So if it's too small to matter then why so adamant about hiking it? Highly recommend a macro and micro econ course. The concept of nominal vs real interest rates is fundamental. If you're on a "fixed income" (hate that term, we're almost all on a "fixed income" and lots would love to have a fixed income they don't have to worry about losing!) you are really impacted by how much interest rates exceed or don't exceed inflation. That delta has changed very little over time, no matter if interest rates were 1% or 15%. The senior on a "fixed income" is no worse off now than they were in 1950. Grumpy old men are still just as grumpy though.
Several reasons. First, going to ZIRP was stated by the Fed to be "emergency policy". There is no further reason for "Emergency" policy 7 years after the fact. Second, the Fed has indicated all year that "lift off" was coming. In order to maintain credibility (which is rapidly waning) this was the perfect time to do so. Additionally, the Fed has stated, several times, that it does not base US policy on the "goings on" of the world and is not beholden to the stock market. Hiking now would have been a step in that direction. After all, it's a measly 25bps. Thanks for your recommendation. I work in Finance and understand nominal vs. real quite well. Fixed income is often referred to those who rely on savings and the returns of fixed investments. Not fixed income vs. variable or anything like that. I used the generic term you see when the subject is discussed, and you understood what I meant. Don't get all semantic on me, the point of the conversation is to converse and relay ideas between one another. The senior on "fixed income" is a lot worse off. That's one of the reasons you see 55 and over going back to work, or not retiring, etc. Heck, a good deal of the employment gains in the past few years were the 55 and older crowd.
Inflation in food, housing, medical, etc. - the things we call "living index" are quite higher than the overall 1.5%-2.0% published rate in the last decade. Hedonics and inclusion of "other" items not critical to survival have significantly understated inflation. Additionally, the "real" income of folks isn't exactly doing wonders (unless you're lucky enough to live in the Fed's sprinkler system of free money).