Countdown to Liftoff

One of these days, the Federal Reserve tells us, it will decide to raise interest rates.

The
announcement will be akin to a doctor’s decision that a patient is well
enough to be gradually taken off medication. The thinking inside the
Fed is that the economy is finally healthy enough that borrowing costs
should return to more “normal” levels to help keep future inflation from
accelerating too much.

But it is a moment with challenges. It
could send markets into a tizzy (if past experience is any guide), lead
to a slower economic recovery and make it harder for workers to press
for higher wages. For savers, it could signal higher returns, but those
borrowing to buy a house or a car may soon have to pay more.

Nearly seven years ago the Fed put its benchmark interest rate close to
zero as a way to bolster the economy. And for months now, officials have
said they might raise rates by the end of 2015. Recent statements
underscore an intention to act at their final meeting of the year, in
December.

(via NYT)