Fed will raise rates because govt wont stop spending. More treasury debt means higher interest rates. Or maybe the Fed cares more about public approval than the bankers’ money.
I can’t say I agree with that. They might disappoint by not lowering them.
To my way of thinking, with all its caveats and shortcomings, raising rates means the Treasury has to pay more in interest on US bond debt. The amount the Tsy has to pay in interest is already roughly as much as the defense budget. It may be a tad more. If the Tsy has to pay more than it already is in interest on the debt, I suspect the market will assume the Tsy is printing more money = inflationary. So to my way of thinking, raising rates at this juncture would actually be counterproductive, if fighting inflation is the core concept. Not to mention the braking effect on recovering economic activity and the usual hesitancy raising rates in an election year.
But I feel bullish about the market because the wall of worry is so formidable at this point. I think the market, particularly the tech sector of the market, has vigorously shrugged off the higher rates we see as of today relative to a few years ago.
I do not expect rates to decline.
Until taxes are increased.