Last week I asked whether or not the Federal Reserve should raise interest rates. I did not answer the question, suggesting instead that the reasons for higher interest rates put forward in media - namely that our economy is doing better than expected - are actually not accurate. I pointed to weak growth in GDP and consumption, to a stagnant job market and to clearly weakening business investments. I especially pointed to the sharp decline in business investments in structures and equipment. Both of these variable indicate that our businesses have excess capacity, indicating production is at a peak for this business cycle.
I still maintain, though, that the Federal Reserve should raise interest rates. There are, primarily, four reasons for this.