James Pethokoukis at The Week suggests that Hillary Clinton will win because the economy is so good. In the other hand, something bad could happen such as this:
Now, there are no economic guarantees here. Maybe the Yellen Fed will start reading too much Austrian economics, freak out about inflation, and crank up interest rates so high that it causes a recession. Of course, that’s unlikely. The more likely scenario is more of the same, and the slow-but-steady Obama-era recovery keeps chugging along.”
While it seems unlikely that Yellen will be reading “too much” Austrian stuff any time soon, what’s needed to “crank” up interest rates “so high” that a recession results is probably much less than Pethokoukis imagines it is. We don’t need interest rates at 6 or 7 percent (rates that were once considered moderate) to stick a major wrench in the economy. The Fed is afraid of letting interest rates rise to anything much above zero. Which is why the Fed Funds Rate is still at zero.
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