Fed Rate Hikes, US Treasury Market And Crisis Of Empire
This past week, the Federal Reserve raised its benchmark short term interest (Federal Funds) rate a minimal quarter point, .25, from 3.75% to 4.00%. Expectations are strong for yet another .25 hike before the end of 2026.
Goods and services inflation in the US has recently begun to accelerate and the conventional wisdom in the mainstream media is that the Fed is raising rates in order to dampen inflation.
But is that the case? Or is there something else behind the rate hikes?
As the argument goes, Interest rate hikes dampen Consumer and Business demand for loans and thus consumption and investment in turn.