[The FED is political and will need to be gutted.]
Correct
[Yellen is an Obama partisan and her days are numbered.]
I certainly hope so.
Bad news: Trump can only replace 2 board members during his first term. Yellen is one of the inflation “doves;” the other 4 are far more itchy to send short-term interest rates through the roof.
Good news: 3-month rates have little effect on the deficit. Long-term rates can often go DOWN in response to short-term rates rising.
Scary news: If the long-term rates go below the short-term rates, banks lose money by lending money out, and will cause a credit crunch. In every case, this leads to a recession.
Terrible news: At best, the federal reserve seems to be the only organization left in the world ignorant of this fundamental rule of finance. At worst, they’ve deliberately caused whatever recessions we’ve had, when we’ve had them.