This week, the FED will be reviewing how much to raise interest rates… again. How much further can it go?
It is all about inflation.
The reason for these increases in interest rates is to try and get control of inflation. Given how much inflation we are seeing and how little serious effort seems to be going into the ‘stop printing money’ side, interest rates will need to go much higher to deal with these crazy inflation levels.
Not trying hard enough.
There are a few ways to fight inflation. However, I cannot help but notice that the only serious attention has been given to raising interest rates. Of course, that means YOU pay. All of you, even if you are not borrowing! Inflation is the invisible tax that makes the dollars in your pocket worth a little less each time a new dollar is created. So as more and more money gets printed, we all bear the burden.
It is going to get much worse.
With inflation and recession butting right up against each other, it is hard to see a way forward that is not extremely painful. See my last podcast on the subject. To get control of this inflation, rates will need to go much higher – and with an election cycle coming up, few will be willing to make the calls that matter most.