You're effectively lowering the cost of capital for corporations, and anything to lower that cost will help in inducing more plant and equipment spending.
More Quotes from Paul Kasriel:
The Fed is a price fixer it fixes the price of short-term credit. If there's an increase in demand for credit, interest rates want to rise. But because the Fed is fixing the price of credit to keep rates from rising, it has to create more reserves or allow banks to create more money, and that's what leads to bubbles.Paul Kasriel
Fed policy-makers think their job now is to play a supporting role. They kind of want to drift into the background.
Paul Kasriel
It seems that what it allows you to do is ... stay in business with somewhat of an unfair advantage over your competitors, who still do have to pay their debts and pay interest on those debts.
Paul Kasriel
The problem is that labor has basically priced itself out of the market. We had a very sharp run up in compensation costs in the late 1990s. People got too expensive and they're still too expensive.
Paul Kasriel
Nobody wants a strong currency, and since the U.S. currency is fundamentally weak, foreign central banks need to buy up dollars to keep their currency from appreciating.
Paul Kasriel
Economists are notoriously bad at predicting turning points. They're like credit ratings agencies, they don't anticipate things very well.
Paul Kasriel
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