The chairman of the Federal Reserve Jerome Powell has very sensibly reviewed the current economic climate including a potentially messy Brexit, slower growth in China and low inflation and low oil prices and decided not to continue its policy of interest rate rises and slow the sale of its acquired debt instruments to the market in order to  relieve the pressure on interest rates.

Its a decision  I supported in earlier posts and I continue to support it now.     Despite the solid growth in the global and American economy there.are still some fault lines present that are traceable back to the 2008 crash which could prove very damaging if the Fed engineered a slowdown now.  there is considerable evidence both in the data and the literature on the natural rate and the NAIRU of a wide range of possibilities regarding the effect of low unemployment on prices . As Robert  Solow and  John Taylor reported in 1999 quoting a paper by Douglas Staiger,James Stock and Mark Watson published in a collection by Christine and David Romer “the Nairu is imprecisely estimated” so prudence about raising rates is a sensible conclusion.  Other economists like Robert Eisner, John Hotson and myself  and others have made this argument in a number of papers over the years.( See Robert Solow and John Taylor , Inflation, Unemployment and Monetary Policy. The MIT Press Cambridge Mass., 1999 p 14, Harold Chorney , Restoring Full Employment, The Natural Rate of Inflation versus the Natural rate of unemployment paper presented at Adelphi university at the Conference on Social Policy as if People Matter, Garden City New York Nov.12 2004;published on this web site Sept.19,  2011.Robert Eisner, How Real is the Deficit ; and Robert Eisner, A New view of  the NAIRU in Paul Davidson and Jan Kregal, Improving the Global Economy: Keynesianism and Growth in Output and Employment. Cheltenham:Edward Elgar)

This may well change in the coming quarters but for the foreseeable future it is unlikely and Chairman Powell has made  good decision.