PHILADELPHIA (CBS) - The Chair of La Salle University's Economics department, Dr. David Robison, appeared on Talk Radio 1210 WPHT to discuss the latest meeting of the Federal Reserve. Robison stated it is worth paying attention to what they decide to do regarding interest rates.
"When the Fed changes interest rates, all of the interest rates in the country are going to start moving. If you're looking to buy a new house, the mortgage interest rate will move up. On the other hand, if you're a saver, the interest rate you receive on your savings will move up. So whether you're a saver or a borrower, you're going to be affected. Which essentially means, all of us will be affected."
He explained any action they take will be designed to control inflation.
"The Fed is a very data organization and if they see in the data any hint of significant inflation starting to pop up, they're going to move fairly quickly to change interest rates as a way to tamp down the potential for that inflation. They're watching the employment figures, they're watching price figures, they're trying to pay attention to all of the data to figure out when would be the right time to keep the economy from overheating and heading into an inflationary period."
Robison dismissed calls from some that the Fed needs further scrutiny and should be audited.
"The Fed tends to be fairly direct and is required by law to provide testimony in terms of what it's policies are, why it's trying to do the various things that it's doing, it's expected to explain it's behavior. The whole audit thing, there's a lot of room for debate about that. Technically we can examine the Fed's books. The audit claim is a little specious in my mind."
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