Federal Reserve At End Of Monetary Road [7]
The all important context for Federal Reserve’s interest rate decision, where the Federal Reserve raised interest rates by 0.25% for the first time in nearly a decade has been examined by the insightful Grant Williams [8]. He is very skeptical of the Fed’s ability to continue to control markets much longer … and this is a gross understatement:
None of this has been tried before and, to me, that just demonstrates the dangers. Once you get into a situation like the central banks did in ’08 with this panicking — everyone calls it the Hotel California — you can’t get out. And, so incrementally, they have to keep doing something. Instead of stepping back and letting free markets and business cycles and forces of nature have their way and flush out all of the impurities in the system, this is what happens. And, yet, this time, for whatever reason, I think since post-Volker, Greenspan has basically started this ball rolling with this knee-jerk reaction to slash interest rates. And, you can kind of understand it, because everyone was still traumatized by the high inflation of the ‘70s. But, they started and they started down that road.
Click the play button above to listen to Chris’ interview with Grant Williams (59m:06s)
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