(FORTUNE Magazine) – Could the Federal Reserve easily make the U.S. economy grow faster if it weren't hung up on antiquated fears about inflation? That's the current, fashionable line of monetary policy criticism. A small minority of economists, business people, and lobbyists have been talking up this idea for years. Recently, it's been getting serious attention, including front-page stories in major newspapers.

The growth gang argues that the inflation rate is overstated, that the changing nature of the global economy and technology make inflation less likely, and that unemployment is understated. Others are dubious, including Fed policymakers and financial-market analysts.

Let's imagine that the pro-growth critique won out and the Fed moved toward "easier" money. Right now, most Wall Street economists think both GDP growth and the chances of rising inflation are high enough that the Fed should be tightening policy a bit, pushing up short-term rates. Unless the economy slows a lot--and soon--the markets will expect further tightening in the months ahead.

If the Fed really believed the growth critique, it would hold rates steady, or even lower them. What would happen? Long-term rates would probably rise even further. As the chart shows, the markets this year have been pushing up long rates even as the Fed has held short-term rates steady. If the markets thought the Fed was flirting with rising inflation, long rates could zoom.

"With the labor markets tightening and jobs growing at twice the rate of the labor force, this is not the time for the Fed to accommodate those growth views," says Ray Worseck, chief economist at A.G. Edwards. And what if the Fed actually lowered rates, as Northwestern University economist Robert Eisner recently urged in an op-ed piece in the New York Times? Says David Jones, chief economist at Aubrey G. Lanston: "It would be the most irresponsible thing they could do. It would wipe out their credibility. And the economy would be worse off."

--Rob Norton