Cascading government debt, suppressed interest rates, and wholesale debt monetization have completely boxed in the Federal Reserve, leaving it with nothing but unpalatable options. From MN Gordon at economicprism.com:
Settling wreckage from the past with realities of the present can be difficult and painful. If you do the crime. You must do the time.
When it comes to financial markets and the economy, this can take many forms. Some of the most common include bankruptcy, shuttered businesses, and collapsing share prices.
This week Federal Reserve Chair Jay Powell and his cohorts at the Federal Open Market Committee Meeting (FOMC) raised the federal funds rate 50 basis points. This marked the first 50 basis point rate hike since 2000. It is part of the Fed’s initial efforts to settle up on wreckage from the past.
The world has changed markedly over the last 22 years. Certainly, the economy and financial markets have become twisted and warped. Without the proper perspective everything from the price of a gallon of gas to the price of a house is muddled and confused.