By Brian Kesten
Even as the U.S. continues to rebound from the financial crisis that began almost a decade ago, the Federal Reserve announced Thursday that the Federal Open Markets Committee (FOMC) would continue to hold rates at the record low. Although thirteen of seventeen Fed officials still believe interest rates should increase in 2015, the Fed held off for at least a few more months. As the global focus on Chinese currency depreciation and stock market tumult continues to send shockwaves through international markets, the Fed pointed to stubborn domestic wage growth and fragile global economic conditions in justifying the non-move.
Progressive economists, such as Joseph Stiglitz, had advocated a rate hold as a means of reducing inequality and protecting worker wage growth, rather than worrying about inflation. On the other hand, the pages of the Financial Times are filled with opinions denouncing the Fed’s skittishness, and questioning the independence of the Fed board altogether.