Byron Dorgan: “let briefly turn to one additional subject. That is the question of interest rates and the Federal Reserve Board. I want…”

“let briefly turn to one additional subject. That is the question of interest rates and the Federal Reserve Board. I want to talk about this because it also affects farmers--not just farmers, but all producers and all Americans. There is a lot of discussion these days about what is happening to the economy in our country. We have plenty of challenges. But it is also hard to miss some good news. The unemployment rate has gone way down. And the Federal Reserve Board, as most of us will recall, said: Now be careful, because if the unemployment rate ever falls below 6 percent there is a natural rate here below which we will get new waves of inflation; go below 6 percent, the Fed said, and we are going to have inflation problems. Of course, the Fed was dead wrong. We have had unemployment below 6 percent for 4 years now. Inflation has not gone up, it has gone down. But this is good news for the economy. The unemployment rate continues to be down. The Consumer Price Index has gone way down too. The core rate with respect to the CPI is 2.2 for the last 12 months ending in July. Finally, the real Federal Funds Rate, that is the short-term interest rate, adjusted for inflation, that the Federal Reserve Board sets, is 3.9 percent, the highest it's been in nine years. When inflation is way down here and the Federal Funds Rate, the real interest rate, is up here, you ask the question: Why?”