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A CHRISTMAS `GIFT’ FROM THE FED

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Though the Federal Reserve Board gave the nation a Christmas present this week by deciding to hold off on another hike in interest rates, it's hard to feel grateful.

That's because the FRB is widely expected to hike rates again early next year in the name of fighting inflation even though it has boosted rates six times since last February and the price spiral already is well under control.What folly! The Fed refuses to recognize that technological improvements and stiffer competition can promote profits and productivity without driving up prices. As a result, many Americans have enjoyed a very good year - with economic growth close to 4 percent while unemployment is down to 5.6 percent and inflation is down to 2.7 percent.

But such achievements don't seem to impress the Fed, which worries about early signs that consumers are spending briskly for the holidays.

Never mind that when merchants suffer, so do manufacturing, employment, and eventually consumers, too. Never mind, either, that each one percent increase in interest rates adds $45 billion to the federal deficit, offsetting federal and state tax cuts.

Only five weeks have passed since the last interest rate hike. And now those jolly old elves at the Federal Reserve Board are generously waiting until after the holidays are over before imposing a seventh increase in 12 months? Bah, humbug!