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There appears to be a correlation between the artificially low (read manipulated) Federal Reserve fed funds rate and the ever burgeoning Federal debt and deficit. When interest rates are at normalized levels, the debt and deficit remain subdued. But very low interest rates usually associated with a downturn in the economy, promote rapidly increasing debt and deficits. When the US economy is doing well, rates historically have been about 7%. Since 2001 the fed funds rate has averaged 1.5%. So why is the fed funds rate being held so low? Probably because the economy isn’t as strong as is suggested.
