The More Things Change...

Blawgconomics has, in the past, opined that interest rates would have to come up at some point this year to avoid some of the very types of problems they were cut to remedy. However, recent rumblings in Washington suggest that interest rate tightening may actually become less likely as noted dove Janet Yellen has emerged as the odds-on favorite to gain nomination to the vice-chairmanship of the Fed. Yellen, the current president of the San Francisco regional Fed branch, shares Chairman Bernanke's inclination toward keeping rates low to stimulate economic growth, and has been more concerned about unemployment than inflation in recent speeches.

While unemployment remains a concern, the status of the dollar, inflation, and future bubble creation should all be given attention by the Fed. If they are not, and rates remain down at essentially 0%, some of these ugly factors will undoubtedly raise their heads as they have in the past. Like so many other things, it seems that with the economy, the more things change the more they remain the same.