The dollar stands firm ahead of crucial inflation data. 💵📊 #Forex #Inflation #Economy www.zeebiz.com/markets/currency/news-dollar-holds-its-ground-as-key-inflation-data-looms-288940

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

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.