The Economist: Why the US should raise interest rates and return to its policy position of last summer

A Weekly Digest of The World's Financial Press

THE FED cut rates three times last autumn. [But] since September, fears of a credit crunch have dissipated; the Dow has risen some 25 per cent and the US economy has grown even more briskly than predicted.

There is a risk that a rise in rates might trigger a fall on Wall Street, harming not only the US economy. But while the Fed should be raising rates, the European Central Bank should be cutting them, and Japan needs reflation too. For the Fed, doing nothing is riskier still. It is not the central bank's job to prop up an overvalued stockmarket.

- Editorial