So will the fed raise rates and kill inflation?

[nero3]

And even make this similar to 1981? With a strong dollar, emerging market defaults, etc, and a strong US economy for the next years?

That would at least be a surprise.

http://www.cnbc.com/id/31164003

US Treasurys Yields Climb on Rate Rise Speculation

[*T*]

Re: So will the fed raise rates and kill inflation?

And even make this similar to 1981? With a strong dollar, emerging market defaults, etc, and a strong US economy for the next years?

That would at least be a surprise.

http://www.cnbc.com/id/31164003

US Treasurys Yields Climb on Rate Rise Speculation

My feeling is that they may raise rates a bit, but not so much that real rates are positive. There would be (further) carnage if they did.

I don't believe LT rates are rising from rate rise expectations, but more as a supply vs demand effect.

[nero3]

Re: So will the fed raise rates and kill inflation?

My feeling is that they may raise rates a bit, but not so much that real rates are positive. There would be (further) carnage if they did.

I don't believe LT rates are rising from rate rise expectations, but more as a supply vs demand effect.

That's well put. I will certainly watch the 200 day moving average of the S&P 500 closely, and see if it can stay above it.

I really think the intervention is perhaps forcing the economy into stagflation through all the spending and ballooning balance sheet of the fed, and that they must nurture that inflation by keeping real rates low, similar to the seventies or 1938-1949. I think that's really the job of Bernanke, to run the printing press in a manner that

However, the federal reserve tightened in 1949, and was able to further press down long rates, and create a deflationary boom lasting to 1965.

They was also forced to raise rates in 1931 to prevent a drain on the gold reserves, they could be forced to "protect" the long bonds, that act as gold in todays system.

It just seems that it's to early to tighten, it seems unlikely that they are ready for that pain as stocks are not yielding enough, they should be yielding far more, when inflation is ready to get killed, unless there is a way to create another deflationary boom through pushing up short term rates, and have a new wave of falling long rates, as everyone else but the US have to devalue.

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