The Federal Open Market Committee raised rates for the second time this year, raising the band to 1.75/2.00%. The FED has also upped its optimism for the growing economy forcing many to believe we will see 2 more 25bp hikes this year. We thought it was ironic that the WSJ had an article entitled “Consumers feel pinch as Fed tightens policy,” right next to the rate hike article. So, on one hand they are raising because of the growth, but on the other they are saying the consumer is feeling the effects. Now we know policy acts with a lag, but we would rather the FED admit that we live in a 2-tiered economy, one by which a very select few have benefited immensely, while the majority continue to be saddled with massive debt and debt associated costs. What is obvious to us is that the FED truly doesn’t care about the overall disparity as long as inflation grows just enough, to gradually de
base the monetary base. Chair Powell even suggested that
inflation above 2% wouldn’t be a worry
at this point, yea no kidding, how else do we purge debt…but inflate it away.