Quote:
Originally Posted by antzcrashing
Fed dropped the ball when they first found inflation to be transitory. It has run from there. The higher rates will help cool things but it has already become ingrained
|
Precisely. They left rates too low for too long and then responded too late. Toss on an additional $5 trillion in direct federal spending the last three years and you've got a recipe for inflation madness.
Fed's trying to avoid breaking something catastrophically. Crypto got deflated, building materials are deflating, consumer goods are deflating, and now the real estate market is really starting to show it.
So far, they've actually done a decent job of not cratering the economy, considering it takes ~12 mos. for rate changes to be fully absorbed by the market.
The problem is that there's always something lurking out there that will suddenly pop and cause a cascade - and nobody knows what that "thing" is.