When the Federal Reserves Open Market Committee meets again in March I believe that

they should raise the federal funds rate by percentage point, provided that the economy has
continued to grow and stay in the current financial state. The federal funds rate, which is the rate that
banks borrow money from other banks has been at 0% for almost 7 years, essentially free money.
The Federal Reserve Open Market Committee elected to have a 0% interest rate in order to help the
U.S. economy recover from the worst financial recession America has seen since the great depression
When the federal fund rate is increased, everyone is affected, the borrowing rates for
mortgages, student loans and even credit cards are affected. In the past it seemed as though
Americans would never be able to afford higher interest rates. Given the current global economic
position America seems to be doing well in relation to other countries like Brazil or China, but an
increase in the federal fund rate would have to be small and incremental as the rate should grow with
our economy. The American economy has been growing, for example The Economist has stated that
Americans are now considering themselves savers, with spending increasing but also an increase in
average savings accounts. An increase in the federal fund rate would also help those who have their
money in savings accounts or CDs see some growth, more than they have in the past.
The near 0% interest rates have made investors attracted to the stock market as they were
unable to find returns elsewhere, but if rates are increased we could potentially see an end to the bull
market that we have seen for so long. According to CNN the end of the bull market can bring an error
of prosperity and safe investment to America, something much needed.
The American economy is finally recovering from the recession that occurred a short 7 years
ago. The growing economy has even lead to a decrease in unemployment, according to CNN money,
the unemployment rate is below 5% for the first time in years this January. Given that the
unemployment rate is down, much more of the economy will be able to afford the higher interest
rates.

Works Cited

Cox, Jeff. "Fed Raises Interest Rates, First Time since 2006." CNBC. CNBC, 16 Dec. 2015. Web. 09
Feb. 2016.
"Janet Yellen: End of an 'extraordinary' Era." CNNMoney. Cable News Network, n.d. Web. 09 Feb.
2016.
Leubsdorf, Ben. "Economic Tumult to Color Janet Yellen's House Testimony." WSJ. Wall Street
Journal, 9 Feb. 2016. Web. 09 Feb. 2016.
RA. "The Fed Makes the Best of the Bad Situation It Created." The Economist. The Economist
Newspaper, 28 Jan. 2016. Web. 09 Feb. 2016.
Rgan, Matt. "2016: Why the Bull Market in Stocks Isn't Dead Yet." CNNMoney. Cable News Network,
21 Dec. 2015. Web. 09 Feb. 2016.
"What Does a Rate Hike Mean for Consumers?" CNNMoney. Cable News Network, n.d. Web. 09 Feb.
2016.