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Near Zero Interest Rates

I was recently interviewed for the New York Times article 0.2% Interest? You Bet We’ll Complain.

Fed board governor Sarah Bloom Raskin said in prepared remarks:

[M]any households are benefiting from the low level of interest rates […] [H]ouseholds have been able to refinance their mortgages into lower-rate loans, freeing up income for other uses.

My take on mortgage refinancing:

She blithely assumes that everyone who could refinance their mortgages at current interest rates has done so. She ignores effects of credit scoring and outrageous fees banks are charging for those refinancings.

The more general point:

We are rapidly approaching a situation where Congress and the administration are unwilling to confront bankers on the need of thoroughgoing reform of everything involving household finance and credit reporting/credit scoring because it would cost the bankers money to do so. Our policy makers do need to think about what we are transferring to the banks. Why is the public obligated to provide them with all those subsidies?