Many people are no doubt confused as to why economic conditions are improving but the fed is refusing to raise rates. I propose to share an economists perspective using this simple parable.
Three men are trapped on a desert island, an engineer, a biologist and an economist. After wandering the island, starving, searching for food for several days they finally stumble upon a can of beans on the beach. The men pause, not believing their luck. Suddenly they are hit by a realization, they make eye contact, their brows furrow in deep thought. The engineer is the first to speak, “we could hit the can with a rock until it opens.” The biologist counters, “we should wrap the can in seaweed and submerge it in the ocean until erosion opens the can.” The economist gives both men a condescending look and begins, “assuming we have a can opener…”