I would NOT support 7%, not even 5%, not even 4% FED funds rate based on current inflation. 3% sounds about right at this juncture considering everything.
In my opinion, for the economy to stay healthy and strong, it needs capital formation. With zero rate policy (ZIRP) the money goes to buy hard assets instead of investing in productive main street economy.
Market is still overvalued based on real inflation rate and historical data going back nearly 100 years. Gravity is the real cause for the correction, everything is just excuses to act on it.
http://www.multpl.com/shiller-pe/
Thanks for your response entrophy12.
That’s not too bad an increase.
I’m not totally against a rise in the rate. Right now the market is falling like a rock.
The rate isn’t helping.