In the old days the Federal Reserve could hint at lower interest rates and the stock market and economy would take off. Eventually inflation would rear its ugly head and the Federal Reserve would be forced to raise the interest rates to rein in inflation fears. That was the old days.
In this economy the Federal Reserve is lending money at extraordinary low rates and neither the economy or the inflation rate have taken off. The Federal Reserve’s favorite tool is not working very well with this economy. This brings up an even more ominous question. What if the Federal Reserve’s favorite tool continues to not work when the economy heats up?