The Dean Baker and Jared Bernstein show at the WA Post

A couple of confused economists talking about the fear the Fed might raise rates.

WA Post: As predictable as August vacations, numerous economists and Federal Reserve watchers are arguing that the nation’s central bank must raise interest rates or risk an outbreak of spiraling inflation.

Now the effective overnight rate is .1, that is the market rate. What is the target?
From the Wall Street Week:

With its bond-buying program winding down and the job market on the mend, sometime next year the Fed will likely raise its target on the federal-funds rate from the zero-to-0.25% range it has kept it in since late 2008.

So we have these two characters, Jared Bernstein and Dean Baker worrying about the Fed raising its overnight rate.  But it is already higher than the market rate! What are these two nutheads talking about?  The Fed pays big banks .25% on deposits, more than the market.  These two bozos should be complaining about that, because that has rigged the entire yield curve forcing taxpayers to over pay on rates.

Here is the WSJ again:

But as a result of the huge Treasury and mortgage-buying programs the Fed kicked off during the financial crisis, bank reserves in excess of what they are required to hold have swollen by more than $2.5 trillion. With so much liquidity in the system, setting a target for the federal-funds rate, and then using open-market operations to adjust reserves until that goal is hit, isn't tenable.

In other words, the Fed cannot raise rates that are already above the market. If bernstein and Baker should complain that rates are too high.  The curve, in fact, is inverted with overnight deposits earning more than the yearly one year treasury note.  The Treasury has kept the economy in near recession for six friggin years.  The Fed does not set rates, the Too Big To Fail banks set rates.  Fed officials simply recite bizarre poetry.