Today is the day when we find out whether the Fed will be raising interest rates by 0.25%. In a normal year this might lose a contest for front page space in that event that Angelina Jolie’s dog was lost on the same day, but with the last rate rise a long long long time ago, even this tiny move has assumed a great significance.
Back in the days when The Fed didn’t spend all their time frantically trying to repair the appalling damage caused by previous Fed Chairmen, William McChesney Martin, Fed Chairman from 1951-70 said (paraphrasing) that it was the role of a central bank to ‘take away the punchbowl just as the party was really getting going’. After Volcker in the 1980s though, a persistent deflation took hold in the quality of Fed Chairmen that is perhaps expressed best on the chart below:
