This week, the world of banking and finance waited with baited breath for the Federal Reserve in the United States to hike… or not to hike… interest rates.
This happens several times each year as the central bank’s Federal Open Market Committee gathers to set monetary policy in the Land of the Free.
To be clear, there is no greater power over a nation than having control of its money supply and interest rates.
Think about it: interest rates influence just about EVERYTHING in the economy.
Changes in interest rates influence housing prices, company stock prices, retail sales, food prices, oil prices, and major business purchases.
Interest rates have a significant impact over employment, business investment, inflation, and the currency’s international exchange rate.
Increases in the interest rate even have the power to bring a government to its knees.
This is pretty extraordinary power. And it has been awarded to an unelected committee that has an astonishing track record of getting it wrong.