Zap the ZIRP!

Elena Steier

Economist David Malpass quoted below from the WSJ. (Full article here.) We’ve been arguing this here for some time now. Hopefully it’s not too little too late, or rather should we say too much for too long?

Economics is murky in many areas, but the evidence is clear that price controls (including the Fed’s near-zero interest rate policy) damage markets and force a harmful rationing of resources that hurts living standards.

Wall Street will object loudly to normalization as it did to the taper because it is making huge profits from Fed policy. But gradually higher interest rates will let the return for savers and investors rise, making more loans available for smaller borrowers and boosting jobs and business investment.