re: The Fed makes another .75 bump in interest rates

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raising interest rates now with a promise to lower them in the near future

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It seems the market believes the fed will start lowering rates early next year. I don’t see how inflation gets back to 2% without a significant recession as there’s still too much fight over workers which leads to higher wages which leads to higher prices. I think the fed continues to hit us with “big” rate increases as long as we are in just a “mild” recession. If we’re going to have a recession, let’s make it count and get control of inflation. Having only a mild recession but inflation still well above 2% keeps us in economic purgatory.

quote:

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It seems the market believes the fed will start lowering rates early next year. I don’t see how inflation gets back to 2% without a significant recession as there’s still too much fight over workers which leads to higher wages which leads to higher prices. I think the fed continues to hit us with “big” rate increases as long as we are in just a “mild” recession. If we’re going to have a recession, let’s make it count and get control of inflation. Having only a mild recession but inflation still well above 2% keeps us in economic purgatory

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I agree with this, but I do not think the Fed has the willpower to keep this up. I think we see a .25 hike in September and then that might be it for a while. They are more comfortable with a decade of low grade pain than a year of hurt.