News about interest rates, Fed

Per Bloomberg, “US Consumer Sentiment Slumps as Inflation Expectations Rise” (details below). Add that to other indicators of the slight stagflationary wind blowing through the economy. #economy #growth #inflation #econtwitter pic.twitter.com/BjvuGjeFlp

This, from Bloomberg, in connection with the debate on divergence in central bank interest rate policies. The issue is not about whether, to use @ECB President @Lagarde’s framing, central banks are “not Fed dependent.” They can and should cut first. The issue is down the road –… pic.twitter.com/GuqYyJov5E

Part of the problem for the #Fed is that consumer confidence is not just collapsing due to rising #inflation, but "high" interest rates. So if the Fed tries to raise confidence by fighting inflation with interest rate hikes, it may backfire and cause confidence to plunge further.

The longer the #Fed keeps interest rates at current levels the larger federal budget deficits grow. Rising deficit spending adds to the upward pressure on consumer prices. This pressure will increase when rising deficits lead to a weaker dollar. Higher rates = higher #inflation.