Inflation Becomes a Monster

It’s All About to Unravel

Well friends, we are on the countdown to The Fed’s meeting later this week. I have a real bad feeling about the outcome of how this is all going to play out. Because they are expected to raise rates another ½ of 1 percent. The results may indeed turn out to be disastrous for the real estate and financial markets. Jerry Powell is very possibly going to unravel the markets with these big rate hikes. In my opinion, and with agreement from many economists, all that is needed is to show the public a concerted effort (with the White House), instead of overkill. By this, I mean that 1/4th of a percent is just fine to get the point across. Its easy to understand his (Powell’s) reasoning, I mean the entire world is expecting him to do something to greatly change inflation. The problem is that inflation is not necessarily stopped nor controlled by the Federal Reserve’s rate hikes. It’s a combination of supply-demand, consumer sentiment, other monetary measures, international commodities trading, and more.

Yes, its true that prices are surging, even at a clip of about 8.6% annually. It’s also true that the national price of gasoline has hit $5.00 per gallon, and in some areas (e.g., CA) it is almost $10.00 per gallon. Its also true the Fed needs to prove to everyone (show resolve) that they are all over the situation. The problem many of us have with this is that we hate deep recessions (like in 2008), and that is exactly (not maybe) what these rate hikes will do. Soft landing? No way…about as probable as an Elephant…