Dave says hiking rates to fight an oil spike is the height of foolishness
What is obvious is that raising rates to try to deal with an oil spike is the height of foolishness. If anything, it’s negative. Not that investment will make any difference in the short run, because of course it will not. What it will do is raise the borrowing cost for the federal government and spike the deficit even more, causing an even bigger need down the road for more QE. Because who’s gonna buy the damn bonds? And unless they think that raising rates 25 basis points will make bond yields crater and give them the liquidity to refinance the debt on the long end, good luck with that. That’s all I have to say.
#Macro #Rates #Oil #Bonds #Markets
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