Interest rates may have to rise sharply to fight inflation
But the low-rate era is unlikely to come to a permanent end
JEROME POWELL, the chairman of the Federal Reserve, once compared setting interest rates to celestial navigation. Today, as inflation spikes, there is a growing sense that the Fed has lost its way. It looks as if it is about to make an abrupt change of course by tightening monetary policy hard and fast. That prospect has battered stockmarkets and led many firms and homeowners to wonder if the era of low rates might be over for good.
This article appeared in the Leaders section of the print edition under the headline “How high will interest rates go?”
Leaders
February 5th 2022
From the February 5th 2022 edition
Discover stories from this section and more in the list of contents
Explore the edition
The war in Gaza must end
America should press Binyamin Netanyahu to accept a ceasefire, then press Hamas to disarm
Saudi Arabia is pulling off an astonishing transformation
Muhammad bin Salman is going from troublemaker to peacemaker
What Putin wants—and how Europe should thwart him
Many Europeans are complacent about the threat Russia poses—and misunderstand how to deter its president
Donald Trump is right to ditch Joe Biden’s chip-export rules
Time to get realistic
Luck stands between de-escalation and disaster for India and Pakistan
Sooner or later, the luck will run out
Donald Trump is right to go after metals in the deep sea
Environmentalists should push the UN body that governs deep-sea mining to pass regulations to allow it