The odds of the Federal Reserve increasing interest rates in March have just spiked. Whether the Fed decides to raise interest rates either at the next FOMC-meeting or afterwards, market interest rates are experiencing a rapid increase. The Fed suddenly became the naked emperor. While market rates are on the rise, the members of the Fed’s interest rate committee must pretend that they now, out of a sudden, do have valid reasons to increase the Fed rate: higher inflation, lower unemployment, etc. But the true motive of a rate hike is much more sobering: the Fed’s decision makers do not want to hike rates, but are forced by rapidly increasing market rates.

Market Interest Rates Are on the Rise

Source: St Louis Fed


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