The Falcon of the Federal Reserve Warned that Interest Rates Should be Higher

Thomas Hoenig, president of the Federal Reserve in Kansas and one of the most pro-increase of interest rates in the Federal Reserve, launched a warning to the market when stating that a long period with ultra low interest rates invites to the speculation and is dangerous. The price of money in the Unites States is between 0% and 0,25% since December of 2008.

“When your interest rate is permanently at 0, you are inviting future problems. We know that the 0 isn’t sustainable…the market knows it”, stated Hoenig.

Furthermore, the regional president of the Federal Reserve, stated that the Central Bank of the United States must be ready to increase interest rates although having high unemployment rates.

Hoenig has been positioned as of the the falcons in the Federal Reserve. He appeared in the act of the last meeting of the Federal Reserve, released on February 17th ; asking for a important change on the Federal Reserve’s official message: instead of saying that the interest rates will be low “during a long period of time” say “at the moment”.

This message arrives after Ben Bernanke, president of the Federal Reserve, stated last Wednesday that the interest rates in the United States would remain low during a long period of time.

Bernanke, tried to change the market that way, after the message by the Federal reserve two weeks before, when announced the increase of discount interest rates: what banks pay when they have an emergency of liquidity.

Related posts:

1. Bernanke said that the Federal Reserve will not raise the interest rates
2. The Federal Reserve is optimistic about the economy but will keep interest rates steady
3. Ben Bernanke will Continue in the Federal Reserve
4. The Federal Reserve Increased the Discount Interest Rate
5. The Federal reserve is cheapening the recovery with low interest rates