Forget piddly 25-50 point interest rate hikes. The real pain will start June 1st. Fed will start reducing its balance sheet. (Explanation in comments)
(media.greatawakening.win)
💥 B O O O O O M 💥
The runoff is 0.2% of the monthly GDP, do you think it will have that large of an impact? I know psychologically they markets will freak out for a little while. But will consumers even notice?
The run off is half of what the QE was every month. So whatever effect the QE had roughly half the effect every month. Take a look at the stock market during the QE and you will see how badly things will start crashing.
We’re in a system that has become dependent on virtually free money. They don’t even have to contract, just stopping the introduction of new credit and jacking up the interest rates on the rest of it will take the air out of everyone’s sails. What happens when businesses or people can’t access new capital, and many of those that have loans have their rates increase from 2% to 20%?