It is AMAZING that almost no one is paying attention to how the FED is causing us all to focus only on its short term interest rate.
However, it's mostly about the FED stop purchasing long term bonds, and letting the free market decide what is the rate.
The FED is creating this entire show around interest rates in order to keep everyone focusing on that, instead of focusing on its BRUTAL intervention in the long term bond market.
This intervention is the significant part in holding the market from falling, since once the FED stops buying all these long term bonds, their rates will rise DRAMATICALLY.
This allows the FED to hike rates without TOTALLY COLLAPSING the long term bond market and the housing market with it immediately.
Although it started reducing its purchasing of long term bonds, the FED is doing it EXTREMELY SLOW, while running the “short term interst rate” show like it is the most important thing.
Obviously, the media and all of us are totally hypnotized by the FED interest rate show, just like a hypnotized person looking at the pendulum in hypnosis show.
And all of this is in order to show that the FED is fighting inflation.
SHOW TIME will arrive when the FED really pulls out its sticky fingers from the bond market.
Have a nice day!!!
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