What are the implications from a monetary policy perspective?
This concern, however, is justified only if the interest rate rise results from a monetary policy tightening aimed at taming demand growth, an event with near-zero probability for years to come.
There was no concerted effort anywhere else in the world from a monetary policy or perspective.
Paying back one's creditors is not the same as resuming economic growth, and the country would still face the fallout not only from its spending cuts and tax increases, but also from sharing a monetary policy and exchange rate that for it is deflationary.
Of course, once the signs are visible, it is likely too late to avoid a recession, as there is typically a six month or greater lag time from the implementation of a monetary policy decision (higher or lower rates) to the impact of the move.
From a monetary-policy perspective, what the White House wants, above all, is a Fed chair who is committed to growing the economy and bringing down unemployment.
Until recently, the consensus was that the multiplier in the UK, after taking account of the boost to the economy from a looser monetary policy, was about 0.5, which meant that although austerity would have some bad effect on economic growth, it could at least make inroads into the deficit.
Mr Brown, who has made productivity his thing, has tinkered with grants and education and incentives, but has little to show for it except even more complication for British companies that already complain of overregulation.Britain has also gained from a sensible monetary policy.
President Clinton's speech on Monday calling on advanced countries to support Latin economies, and suggestions in London by officials of the Group of Seven industrial nations of a new economic approach to promote growth in emerging markets, as distinct from a tight monetary policy, were enough for stocks to rally.
"From a pure monetary policy framework, this is probably the best news they could receive," said Jack Ablin, chief investment officer of BMO Private Bank in Chicago.
The economy is forecast to grow 3.6% this year by the International Monetary Fund, which cites "continued support from an accommodative monetary policy stance, despite the projected gradual rise in interest rates".
