Fed pivoting their balance sheet strategy while inflation is still 6% year-over-year

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“We need to keep raising rates until something breaks and inflation eases”

<Something breaks>

“Wait wait no, not¬†that¬†thing.”

It’s very important that inflation is brought into check by poor people losing their jobs. Not rich people losing their deposits.

NEW Banking Crisis In One Chart, Inflation=Fed Rate Hikes=Treasury/MBS Duration Increases=Bond Loss

So, the Biden Administration made a horrible error by guaranteeing deposits at Silicon Valley Bank for deposits over $250,000. Essentially, Biden bailed out big tech that kept their deposits at SVB.

New York Times: “Low Rates Were Meant to Last. Without Them, Finance Is In for a Rough Ride.”

 

h/t EwokTusk

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