HARM

Another Reason The Fed Won't Raise Interest Rates

<i>Why should the Fed pour fuel on the fire?</i>

I don't think this is an appropriate metaphor to use in this case. Greenspan lowering FF rate to 1% and holding it there nearly 3 years was certainly "pouring fuel on the fire" that became the housing bubble. So was actively encouraging people to jump into option-ARMs in 2004, refusing to burden lenders with "unreasonable" regulations such as requiring full income/asset documentation, uncoerced third-party appraisals, down-payments, etc.

Belatedly raising rates above the current (negative in real terms) 2% is hardly "pouring fuel on the fire". On the contrary, it would be pouring *water* on the raging fire that is commodities inflation --which the Fed itself is largely responsible for.