The Fed’s Unwarranted Skittishness

The Federal Reserve has forecast sustained economic growth when it raises the federal-funds rate. Yet in 2013-14, even before ending asset purchases under its third round of quantitative easing, the Fed expressed concerns that a one-quarter percent rate increase could sidetrack the economy. And this year the Fed has said that a stronger dollar would harm the economy. Are its fears warranted? Recent history says no.

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