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The central bank that cried wolf? Talk of higher U.S. interest rates is often just that

Is the Fed crying wolf about higher interest rates? Or are they trying to herd investors like sheep into doing the work for them?

Two years ago, a prominent central banker suggested interest rates could rise “sooner than you think” after an unprecedented five-year stretch of easy money. Earlier this week New York Federal Reserve President William Dudley issued a similar warning to financial markets.

Bank of England Governor Mark Carney never acted on his warning in 2014. The U.K.’s key lending rate remained at 0.5% — where it had been since 2009 — and the bank actually cut it to 0.25% earlier this month.

Bank of England Governor Mark Carney is one of many central bankers who has warned about higher rates before and been wrong.

Will history repeat itself in the U.S.? Probably not. The U.S. central bank is more likely than not to...


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