The Real Reason For The Fed Hikes (And The Only Things That Will Stop Them)…” they’re getting ready for the next recession”
by Craig Wilson via The Daily Reckoning,
ZeroHedge.com
Jun 21, 2017
Jim Rickards joined Boom Bust and host Lindsay France to discuss the latest monetary policy moves from the Federal Reserve.
While the interview was held prior to the Federal Reserve’s quarter point hike to interest rates, all of the core items covered are even more relevant now. To dive further, Jim Rickards explains the real reason the Fed raised rates and what he thought was next for the Fed and the market.
The Boom Bust host began by asking what he was looking at for reaction to the Fed. The economist remarked,
“It was already priced into the markets. What the market is really looking for is some guidance from the Fed about balance sheet normalization. Before the last financial crisis the balance sheet was about $800 billion. They’ve taken it to $4.5 trillion which is how much money the Fed has printed in the last eight years. They now want to normalize that and get it back down.”
“The reason they’re doing both… raising rates and the reason they’re normalizing the balance sheet is because they’re getting ready for the next recession. Research shows that you’ve got to lower interest rates about 3% to get out of a recession.”
Fed Hikes and Recession
The rest…HERE
