Raising interest rates has no effect. Banks won’t lend at 4% when there’s 8% inflation, no matter what the federal reserve rate is. Chasing the mortgage rates upward is merely ceremonious.
The way to cool inflation is to stop the federal reserve’s asset purchases, which directly inflates asset prices. The problem is these assets have to be sold back which will deflate asset prices. Essentially, the government found a way to spend trillions of dollars in Keynesian spending without actually producing anything, but also without requiring legislative authorization.
“Essentially, the government found a way to spend trillions of dollars in Keynesian spending without actually producing anything, but also without requiring legislative authorization.”
Nice work if you can get it.
“The way to cool inflation is to stop the federal reserve’s asset purchases,”
The FED is doing quantitative tightening right now, selling off those bond purchases. It’s not being talking about but that’s having more effect than the .75% raises.