The Fed and the Economy: What We Think and What We Want

As the debate over a Fed interest rate hike heats up, it is worth noting an important distinction between the types of issues being debated. On the one hand there is a debate over what is likely to happen in a scenario in which the Fed soon begins raising interest rates and one in which it does not. On the other hand there is debate over what we want to see happen.

The first question has to do with the likelihood that we will see more rapid wage growth and more rapid inflation if the Fed hold...