The Interest Rate Conundrum

Federal Reserve Chairman Alan Greenspan keeps ratcheting up short-term interest rates with the expectation that long-term rates will follow. But he can't seem to get those long-term rates to go up. Greenspan is calling it a "conundrum" and it could be a signal of hard times to come.

Greenspan's fighting against the bond market, against China, which is pouring money into U.S. treasuries, and against Wall Street, which apparently doesn't believe the U.S. economy is really back on its feet.

Low long-term rates have meant a boom for the housing market but it can't go on forever. Interest rates are bound to go up, the dollar is bound to drop, and the economy may be in for a crash landing.

Hear a discussion on the mystery of America's strangely low long-term interest rates, and what they mean for its economy.

Guests:

Greg Ip, economics reporter for the Wall Street Journal

Campbell Harvey, professor of international business at the Fuqua School of Business at Duke University.

Jeremy Siegel, professor of finance at the Wharton School of Business at the University of Pennsylvania.