Ben is still in a tough spot, and the longer he does nothing the tougher it will get before he does.
He is faced with inflation and employment problems. The former says leave as is or even raise, the latter says cut.
The real problem is a decision to help one increases the problems in the other – a rate cut may help jobs (though not the mortgage related ones to any noticeable amount) but will further kill the dollar. No change will probably not be as bad as everyone thinks, but will be the scapegoat for things that would have happened anyway, i.e more foreclosures and layoffs.
I think the bottom line is what does Helicopter boy see as a bigger potential problem – weaker dollar, or slower/spending more job layoffs.
IMO, the job layoffs are coming anyway. You can’t fuel our economy for 5 years on debt, then when the source of that debt dries up, expect anything to prevent contraction.
I wonder what would happen if they raised rates – people might actually start saving money? The dollar might be worth it’s weight? Who knows.
