[rigelkentaurus]

Mr Market is saying that the Fed is not serious about fighting inflation, as shown by the Fed Funds futures.

[Deo volente]

Mr Market is saying that the Fed is not serious about fighting inflation, as shown by the Fed Funds futures.

Yep. Another .5% will bring it up to 1.5% at most, still absurdly low. A rate of 5% is more like it, but that will strain the budget as debt servicing will reach $1.5 Trillion each year. If we get hyperinflation, which is quite possible, then they'll really have to raise the funds rate to more like 10%. Then we're looking at $3 Trillion each year in interest, with the necessity to raise taxes through the roof to gain control. Otherwise there will be annual deficits of several trillion and a vicious cycle takes over. There already are annual deficits of about a trillion.

This thing will never end unless we bring the gigantic federal budget down to size. It will take radical cuts which few politicians are willing to consider.

[Starboard]

Agree. It won’t take much to get the Fed to soften its “resolve” to fight inflation.

After all, inflation is not the threat to wealthy the way it is to those who are less fortunate.