It makes 'ABSOLUTELY NO SENSE' for the Fed to do this, expert says

Central Banks and Interest Rates - 21 central banks are expected to meet this week without making any changes to interest rates, but future meetings may see anticipated rate hikes due to rising oil prices [1] - The Federal Reserve's potential response to oil price spikes is under scrutiny, with suggestions that hiking rates in response to temporary oil shocks could be detrimental to economic growth [2][3] Economic Impact of Rate Hikes - Hiking rates in response to an energy shock is viewed as harmful to the economy, particularly for small and medium enterprises that are crucial for growth [5][6] - Historical context is provided, referencing the European Central Bank's rate hike in 2008 when oil prices were high, which led to negative economic consequences [4][7] Private Debt Concerns - Private debt is acknowledged as a concern, particularly for small firms facing challenges, but current default rates remain low at around 5% to 6%, indicating no immediate crisis [8][9] - A potential rate hike could lead to a credit crunch, limiting access to credit for small and medium enterprises, which could exacerbate existing challenges [10] Fed's Role and Stagflation Risks - The Federal Reserve is urged to remain data-dependent, with concerns that maintaining or increasing rates could lead to stagflation if coupled with increased government spending [12] - The Fed's current stance is criticized for potentially harming job growth in small and medium enterprises, with estimates suggesting that elevated rates could destroy a million jobs [12]