The Fed Plan: Two More Years of Stupid Things

The WSJ reports on an interview with a Fed official who says that the central bank will keep rates at 0% for two more years at least. But right now, banks have no reason to lend (zero earnings) and no one has any reason to save (zero earnings), and the risk associated with long-term projects is nowhere reflected in these obviously phony rates signals. What’s striking too is that the plan hasn’t worked, just as it didn’t work in Japan. And yet the Fed persists.