Higher rates cause productivity growth?

Bloomberg: A key factor in the speed of interest rate rises will be productivity. As of December it had slumped, averaging just 0.5 percent over the previous four quarters on a year-over-year measure.

“I’m much more worried about productivity now than I was a few years ago,” Posen said. Weak productivity growth may boost the case for higher borrowing costs if it causes the economy to be unable to grow without creating inflationary pressures, he said.

Wage Push

“If you accept that we’re going to have this domestic wage push, which is the assumption they’re making, the fact of a productivity slowdown actually makes you more likely to want to raise rates,” Posen said. “So if you’re a productivity bear, you’re a Fed hawk.”

Rates are low because of  low productivity in the Swamp.  Perhaps the Fed has not noticed, but the borrower is the Swamp, just take a look at tyhe 2.4 T in treasuries.   The Fed can only pretend it's the private sector for so long, eventually the Fed takes away the remits to Treasury.