Gruber asked Terry what his thoughts on the biggest Fed rate hike since 1994, which Terry agreed with “the time to fight inflation was months ago.” “It has nothing to do with Putin and more to do with policies, lockdowns, and everything else that came as a result of our COVID reaction.”
It is only a matter of time before the Feds to reverse course, they’re being aggressive now, and raising short term rates doesn’t really do anything. The real issue is the taking of liquidity out of the system.
Car sales are going to go up, real estate market is freezing up, not a lot of inventory, and the cost of borrowing is going up. Fed is going to put the brakes on the economy and they’re going to have a bigger problem than inflation. Terry thinks that the markets are going to fall a lot, unemployment will rise considerably, and we’ll have to follow through with this for, at least, another month.
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