The Fed is suppose to cut interest rates when the economy is slowing down to stimulate growth, and raise interest rates when the economy is booming?
President Trump said we have the best economy ever. At the very same time the President does not want the Fed to raise the historic low interest rates.
This is because for the most part the Fed artificially pumped money into our economy since 2009 to keep it afloat when it should have crashed. We have had a pseudo economy over the last decade to protect the politicians careers and the to bailout the banks quack economics policies.
Now we are in a bigger hole than 2008, and no politician in Washington is being honest about what is really happening.
It is the same with Wall Street rational which is like a child. Investors should be happy to see interest rates climb from historic lows indicating our economy is growing. Instead they do not like it, and maybe it is because they know if it raises too high then the dollar could default?
I have heard the year is 2022 when the minimum debt payment we have to pay will actually exceed the annual tax revenue.
Now you know why crypto and digital assets will be in place, and we can have a smooth transmission to a new “level playing field” that will be better for everyone.
Well maybe not since the old guys (Feds) will have less power, dominance and control than in the past.
You’re right about the fact that the Fed is supposed to act countercyclically. A good thing to keep your eye is the interest rate in real, rather than nominal terms. By that I mean the difference between the interest rate and the inflation rate. Generally speaking, when that is positive, the Fed is on the tight side; when its negative, the Fed is on the loose side. It’s usually negative.
You are wrong about the 2022 date; it’s not even close under current circumstances. But, dramatic things will happen with the size of debt payments due relative to the economy in general and collectible taxes specifically the next time interest rates go up, whether due to tightening, or inflation, or a combination of both.