'The markets need to regain equilibrium. To that end, just for once, the central bankers should keep things steady. For once, they should not just do something, but stand there – placid, confident, and well-composed.' -QuinHillyer
I write this as a decades-long anti-inflation hawk. Rather than inflation-fighting being a co-equal goal for the Fed along with full employment, I wish it were the primary goal.Even from that vantage point, though, the economy needs a Fed pause to refresh.
Meanwhile, the biggest driver of inflation is now housing prices, but that’s a lagging indicator. Rent prices that were locked in during last summer’s hot housing market are expected to decline soon, investment specialist David Bahnsen told Fox Business, because “real estate prices across the board have declined considerably in recent months, and it’s going to take a few more months for the CPI to reflect this decline.
In short, it’s not clear which way prices are trending. And with the Federal Funds interest rate of 5.25%, the highest it has been in 17 years, it would behoove the Federal Reserve Board to stop and see what their rate hikes have wrought before the board goes higher, into territory not seen since before the 9/11 terrorist attacks.
This is especially so right now. The past two months have seen the second, third, and fourth largest bank failures in U.S. history. All three owe at least a large part of their collapses to a deficiency in adjusting their portfolios to account for rising interest rates. The question is, how many more banks are stressed like those three?
Norge Siste Nytt, Norge Overskrifter
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