By James L. Caton
Much drama has surrounded the Federal Reserve chairman Jerome Powell in recent months. Some leading indicators may be signalling a coming recession. In particular, a deepening inversion of the yield curve is cause for concern. Pressure is mounting from President Trump for Powell to lower interest rates, even after many consecutive quarters of an increasing rate of economic growth.
There is some irony in the economic misunderstanding that seems to underlie a call for a decrease in interest rates. Interest rates contain multiple components. The rate of a bond is affected