Fed warns sharp rise in interest rates poses risk to US economy

Financial Times/Colby Smith and Eric Platt/5-9-2022

graphic image collapsing house of cards“A sharp increase in interest rates to tame fresh inflation shocks would pose a risk to the American economy, the Federal Reserve said on Monday as it reported a ‘higher than normal’ chance that trading conditions in US financial markets will suddenly deteriorate.”

USAGOLD note: Odd warning in that ironically one of the biggest sellers of U.S. Treasuries might very well be the Fed in the near future – a liquidation likely to push up yields and encourage copy-cat selling from other players. The stability report itself, as quoted at the link above, is an attempt to warn the markets that financial contagion is possible. It’s almost as if the right hand does not want to acknowledge what the left hand is doing.

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