Fed Risks New Distortions When It Raises Rates

The Wall Street Journal (online registration required): When traders at the Federal Reserve Bank of New York’s Manhattan headquarters get the order to raise interest rates for the first time in nearly a decade, they will be urged on by a plaque down the hall that reads: “Execute policy like a champion today.”

Easier said than done. The central bank spent years pumping more than $2.5 trillion into the financial system in hopes of stimulating the economy. Now it risks creating a whole...

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