Robert Lloyd, CFA
The Fed is pulling our collective leg
Despite all the talk about fighting inflation, the Federal Reserve policy stance is anything but restrictive. By comparing the Federal Funds policy rate (FF), the US 10-year Treasury yield (10yr), and inflation, it is our view that current Fed policies are highly supportive of the current inflationary regime.
While we are likely to see inflation fall as we travel through recession, let's not kid ourselves where the Fed stands on this. By any objective policy measure, they are HIGHLY supportive of the inflationary environment we are in right now. In 1971, the Fed had to raise rates to 9% to suppress 6% inflation. In today's 9% inflationary environment the Fed is lauded as a hero for raising rates to a whopping 2.25%. Do you see what I see?
Robert Lloyd, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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