I tried to pretend not to care about this stuff. But I just can’t pretend to not be interested because the Fed interest rate idolatry illustrated in this article on CNBC about the Fed’s Vice Chairman titled Stanley Fischer: First rate hike will be no big deal is just mind-blowingly insane.

Federal Reserve Vice Chairman Stanley Fischer said it was “misleading” to give so much importance to the Fed’s first interest rate hike since the process of returning to a more normal level will take a few years.

“If the (U.S.) economy is growing very, very slowly we will wait. If the economy is growing faster we will do it quicker,” he said in a speech. “What we are thinking about is raising the interest rate from zero, which is an ultra expansionary monetary policy to a quarter percent, which is an extremely expansionary monetary policy. This will be a gradual process,” he said.

What is missing is the explanation about why interest rates are low. And being a monetary scholar, the former mentor of Draghi and Bernanke, he should know that interest rates do not accurately reflect the current stance of monetary policy, but rather market expectations and realities.

Hey, Mr. Fischer, what is a “normal” rate of short-term nominal interest and why can’t we get there now if the Fed has control of it?

By the way, I want to thank Marcus Nunes for pointing out the James Montier piece that termed the Fed’s obsession with interest rates as “idolatry.” I had been thinking that this obsession is more along the lines of “voodoo economics”, but the word “idolatry” is classier and much more succinct. So it is. Interest rate idolatry.

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