[riggins]

If they raise interest rates, they will have to service their $18 trillion national debt and expose a lot of malinvestment in the private sector.

1. I think the Fed wants to "expose malinvestment". There's some debate about whether avoiding bubbles (i.e. malinvestment) should be a formal part of the Fed's mandate. IIRC, as it currently stands avoiding bubbles isn't a formal part of the Fed's mandate but it would certainly be a desirable policy goal (i.e. the Fed wants to prevent malinvestment from running to far). Also, wrt to servicing debt, the article was about how interest rates are likely to remain low.

If they don't raise interest rates, their only tool to fight the next recession will be to print money, which could cause the currency to collapse.

2. Your claim implies that the Fed raises rates so they have a tool to fight economic slowdowns. That's wrong. The Fed has 2 mandates: stable inflation and full employment. The Fed is raising rates to avoid inflation. You also claim that the Fed will "print money" which could cause the currency to collapse. Its astounding that we literally just went through this scenario, the Fed printed money, the currency didn't collapse. However people haven't re-examined their beliefs. We've now had 2 episodes where major economies resorted to "printing money" (Japan in the 1990's, US in 2000s) ... no currency collapses. In fact, as far as I'm aware, there's no precedent for a country that issues their debts in their own currency having a currency "collapse".

[zo1]

>"In fact, as far as I'm aware, there's no precedent for a country that issues their debts in their own currency having a currency "collapse"."

Have you had a look at Zimbabwe?

https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe https://en.wikipedia.org/wiki/Zimbabwean_dollar#Hyperinflati...