US Dollar

The Fed has raised interest rates – but the era of cheap money isn’t over yet

The iPhone had not yet been launched. Sven-Goran Eriksson was still managing the England football team. A 17-year-old Taylor Swift had just had her first hit. Plenty has changed since June 2006, but one thing has remained remarkably constant – the cost of money. In the nine years since then, the Federal Reserve has cut interest rates, but until yesterday it had never raised them. With the exception of one misjudged rate rise from the European Central Bank, which was quickly reversed, neither has any other country. For almost an entire decade, money has been remarkably cheap by any historical standards.

  • pdxnag

    The Fed’s balance sheet is now full of junk debt that it bought with money it created out of nothing. That’s some competitive advantage you’ve got there, eh.

  • andycanuck

    Actually, this is one thing I don’t think will change under Justin. All the world’s central banks et alia know that if they really begin raising rates, even to historic norms like 5%, that there would be worldwide chaos.

    • dance…dancetotheradio

      Why do you think Stephen Harper put up such a valiant fight in the last election?
      He knows what’s coming.
      Trudeau has claimed a poisoned chalice.