A dark age coming

The headline story in The AFR today begins:

The federal government has slammed plans by business to go it alone on climate and energy policy but industry leaders are holding their ground and have the backing of Labor and the Greens.

It’s a new world out there.

Meanwhile, in the US: Is The Fed Trying To Tank The Trump Economy Before The Midterms? Want to breed uncertainty? Try this on for size:

Dallas Fed President Robert Kaplan said he still favors the central bank raising short-term interest rates three more times before deciding whether more increases will be necessary to keep the economy on an even keel.

This suggests the Federal Reserve should lift rates at its December, March and June policy meetings “unless something changes,” Mr. Kaplan said Tuesday in a Wall Street Journal interview.

Fed Chairman Jerome Powell said then that rates remain low enough to continue stimulating economic growth. But according to the Wall Street Journal other officials have expressed a range of views, and some uncertainty, about how high rates would have to go to reach a so-called neutral level that neither spurs nor slows growth.

A COMMENT ON RISING RATES: I have been asked about rising rates in the comments. And as I have said in the past, rates have been too low for too long which has lowered the productivity of our array of investments. The issue is not whether rates should rise – they should – but whether they should rise now immediately before an election. The effect on share markets was obvious enough. Front-page treatment of a falling market can move voter sentiment, specially the way it can be played on by the media. The Fed kept rates down throughout the Obama presidency and there was never any doubt it would push them up once PDT was elected. Optics is all, and even if the adjustments brought on by higher rates are positive for the economy, it may not look that way to anyone who is paying out more on their mortgages or small-business loans.

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