> "If 18 months ago, you'd have said the Federal Reserve Bank could raise interest rates by 500 basis points, and the consumer would chug on, relatively unfazed, I would have been extremely surprised," says Ellie Henderson, an economist at UK-based, global bank Investec. "I'd have said, 'that's just not how economics works'."<p>Economics is such a funny field to me. The systems involved are incredibly complex, yet economists habitually speak as though their models are anything more than that: models.<p>Somehow we got into a place where policy is made on the explicit assumption that the Federal Reserve Bank is in possession of a mystical lever, a single number that they can change to steer the behavior of more than 300 million people. As a layperson, it's incredibly obvious that interest rates are but a single variable in an enormously complex equation that we have <i>no hope</i> of recreating in a spreadsheet, but somehow that comes as a surprise to the professionals.