The national debt—a barely comprehensible $39 trillion—seems, to hear economists tell it, forever one shock away from bringing the whole country down. Lately, the designated culprit is the Federal Reserve.
The case is relatively straightforward. On June 17, the Fed didn’t raise interest rates—it held them at 3.5% to 3.75%, as expected—but it signaled that a hike could be coming this year, a reversal from a few months ago, when it expected to cut them instead. In his first meeting as Fed chair, Kevin Warsh made clear he’s serious about getting prices under control, with the Fed’s statement vowing that “the Committee will deliver price stability.”
