The Fed Is Officially Screwed: Inflation’s Over 2% Despite 6 Rate Hikes
The comments below are an edited and abridged synopsis of an article by Phoenix Capital
The single biggest concern for the Fed is inflation, because US Treasuries are currently in a massive bubble, and those Treasury yields trade based on inflation.
If inflation rises, so do Treasury yields. If Treasury yields rise, Treasury prices fall. If Treasury prices fall, the bond bubble begins to burst.
Here’s the bad news: Inflation is roaring. The Fed’s official inflation measure, the CPI, is now clocking in at 2.4%, and this is the inflation measure that is meant to understate real inflation.
Elsewhere, there are clear signals that inflation is over 3%, or even higher. And bear in mind, this is happening at a time when the Fed is already raising rates 3 to 4 times per year.
Small wonder, then, that the US dollar is dropping like a stone.