William Silber had one on the Wall Street Journal‘s Sunday opinion pages. Naturally, I have one on his.

The core of Silber’s thought is this:

The so-called neutral rate of interest is observed in hindsight—by whether the economy is expanding fast enough to keep unemployment low but not too fast to provoke higher inflation. By that measure, the current target interest rate of 4.25% to 4.50% seems about right. I say “about right” because the unemployment rate is low but the rate of inflation is somewhat elevated. That suggests, if anything, the target interest rate should be higher to push down inflation.

Silber is right on the first part. He’s wrong on the second. The current target interest rate “seems about right” because it historically correlates with the Fed’s inflation target of 2%. Now it’s time for the Fed to sit down and be quiet—and to say in so many words that that’s what it’s going to do. Excursions above and below the inflation target are just the noise of a free market. The time is not yet—if ever in the current market conditions—to make any sort of move on target interest rates.