In a recent interview, Susan Schmidt Bies (Federal Reserve Board Governor) spoke about the recent elevation in interest rates. She discussed the need for an increase in interest rates which would help the economy reach its full growth potential. She stated,"You cannot keep short-term interest rates below the rate of inflation -- it's too accommodative. We've got to get to what we call a neutral level."
Currently, the inflation rate is a few points higher than the interest rate. The government has plans to continue to raise interest rates slowly over time in order to balance out the economy. I would like to hear some opinions on this topic. I think everyone agrees that it's about time to start raising interest rates, but how high should they go? Who will initially be affected by the changes? What kind of an impact will this have on our current economy?