The Federal Reserve took the highly expected move of raising interest rates by .25% yesterday, bringing an end to an era of easy monetary policy.
The Fed cut rates exactly seven years ago in response to the deepest US recession in decades, vowing to get the economy going once more.
Today, a look back shows that policymakers faced numerous obstacles as they navigated the course to position the economy to bounce back and to restore labor-market health.
Among the many obstacles the economy has faced along the way are periods of rampant unemployment, which peaked back in October 2009 at an alarming 10%.
In July 2011, lawmakers flirted with disaster as a default on debt became a very real risk, leading to a downgrade of the US credit rating.
Perhaps the biggest obstacle was the pace of the recovery itself, which has shown signs of strength at times, but overall has bounced back at a snail-like pace.
Economists have had their chance to weigh in on the Fed’s move, now it’s the actual US economy’s chance to respond to the hike. [Bloomberg]
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