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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: John Koligman who wrote (56152)	4/2/2022 4:12:01 PM
From: Sun Tzu	Respond to of 97984

If any central bank wants to squash inflation, they will have to raise the interest rates above the inflation. Negative real rates are stimulative. It is as simple as that. But the Fed simply cannot sustain a prolonged interest rate above 3% because then the government will have to print more money than the Fed is taking out of the market. If you look at the 1940s, which in some ways is similar to the situation now, the Fed artificially kept the interest rates low because the government could not afford those higher rates. This was despite the high inflation rate and increased government spending.