Economists Issue Predictions for 2010

Denver Business Journal, January 1, 2010

How long can the Federal Reserve keep short-term interest rates at their current low levels before they have to deal with inflation?

“In our view, the Federal Reserve will likely be forced to tighten rates because commodity inflation will ignite before full health is restored to the U.S. banking system. Right now, a zero Fed funds rate functions as a massive subsidy to the banking sector to help cure its past sins, but the policy comes at the expense of both the frugal and risk-averse. This policy can’t continue forever and we feel it will likely end sometime in 2010. The gold market is already telling us that the future purchasing power of the dollar is in question.”
--John Goltermann