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March 2022

Fed to Investors: Just the Beginning

  The Federal Reserve has increased interest rates against the backdrop of war and recession risk. How's this going to affect you? What should we do about this? The Fed has increased the rates one quarter percent. It's the first of projected eight increases for a total increase estimated to be 2% of the rest of the year. This is against a backdrop of US mortgage rates that have topped 4%. Gas prices are above $4.00, oils above a hundred dollars. We’ve got supply chain and labor shortages. And of course, we got this war in the Ukraine. So there's a lot of uncertainty in the environment. The challenge for the Fed is slowing inflation without tipping the economy into recession. Now, any economic historian will say, "If you go back 50 years or 70 years, the Fed typically doesn't pull this off. They typically nip the inflation in the…
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