Although, the Federal Reserve Bank’s philosophy, and approaches, to handling interest rates, often, has a significant impact, on the lives of most of us, as well as the nation, and planet, unfortunately, far – too – few, fully understand, some of the major impacts, and what factors, often, determine, our policies, related to this. Rates are often determined, because of a variety of economic factors, and/ or, realities, as well as perceived concerns, and/ or, fears, regarding, things, such as inflation, recession, depression, stagnation, etc! With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, the 5 I’s of national interest rate policy decisions, etc.
1. Inflation: There is, often, a somewhat, fine – line, between, too much, and a necessary amount of inflation! Because of that, it is, often, challenging, to create, the best approach, so often, the wisest decisions, are determined, by considering a variety of alternatives, and options, and using a risk/ reward approach! Traditionally, when there is a fear of too – much, inflation, the Federal Reserve, has often, emphasized, and focused on, reducing so – called, easy – money, by tightening money supplies, and, raising rates! When, this is done, it costs more, for everyone to borrow, and, thus, slows the inflation! This condition is, generally, accompanied with, upward pricing/ prices, higher cost – of – living, higher loan costs, more expensive mortgages, etc! However, unless/ until, this is done, carefully, and in a measured manner, it may create, a host of undesirable ramifications, regarding several areas!
2. Impacts: Whether rates are high, low, or somewhere, in – between, we usually, witness some sort of impacts! There is, often, a fine – line, between, those who might benefit, versus, become the losers, in every situation/ scenario! Policy must consider impacts, and potential ramifications, in a thorough, well – considered, way!
3. Insights: Many public officials, focus more, on their personal/ political agendas, and/ or, self – interest, than the greater good, and, so, their insights, are, often, tainted! We need to elect leaders, who are ready, willing, prepared, and able, to make decisions, based on well – developed, relevant expertise, rather than, accepting, populist politics, etc!
4. Ideas: When will citizens, stop accepting, and electing, populist politicians, who make empty promises, and using rhetoric, etc, rather than choosing people, who are prepared to introduce the finest ideas, and recognize, how the cost of money, relates to policy decisions, and implementation?
5. Issues: How we proceed, must be based on evaluating current issues, and obstacles, carefully, in a strategic, well – considered manner! Since, everything has ramifications, we must address, how we handle, this area, in a comprehensive way!
We need to begin, demanding, these 5 I’s, become an essential component, considered, regarding, how we implement our national interest rates! We must do so, to protect, both, current obstacles/ challenges, and bring – about, the finest, most relevant, and sustainable solutions!
