The Fed’s rate rise may not provide enough of a boost to the financial sector to allow the US recovery to take off.

Last week, the US Federal Reserve announced that it would increase its Fund Rate by 0.25 percent – the first such increase in nine years. Eddie Gerba writes that under normal economic conditions such an interest rate rise would help savers, lead to more balanced investments, and help firm productivity. But, he points out, conditions post-Great Recession are far from normal. Lower levels of corporate productivity and higher interest rates may mean fewer firms survive, and the financial sector may no longer be able to lead economic recovery due to uncertainty about regulation and the sector’s future.