Wait till the potential-rate is achieved (US)...

There is still unanimity among the economists, even the Fed officials, about rate-hike possibility. Price-stability and full-employment are the two main objective of the monetary-policy and the underlying objective of the above two is economic-growth-(rate). The Fed’s point is that the present rate of growth shows that the economy is on a sustainable-path and the rate hike would showcase confidence in the present and future growth. But, that might diverge the economy to a lower growth-rate because demand and supply will go down due to increase in the borrowing-cost. Higher interest-rate, actually real-interest-rate because of low inflation, may result in higher savings and less spending. By increasing the borrowing-cost the Fed could create some inflation, but, again higher prices will result in lower demand. Low demand will further result in lower inflation and possibly deflation. Economists are arguing that inflation and inflationary expectations are biased lower so there is no need for a hike which could be right strategy under the present-case because demand is yet to pick because the country’s growth potential is above 5%. The Fed should wait the economy to get that pace. Why the Fed would like to hike rates when the economy is growing much below the long-run potential, inflation is too low and the external environment is deteriorating. The Fed might wait till the economy achieves price-stability, full-employment and full-growth... The first two have been achieved...