Carry Trade Trap: The Real Reason Why The Fed Has Waited So Long To Cut Rates

 There were people who argued that the Fed would capitulate to stock market demands, stop raising interest rates and return to QE.

That’s easy to answer: The fed continues to hike rates well into next year and will not reverse course or capitulate and return to stimulus.

The moment they cut rates inflation will spike again and the illusion will be exposed.

This would kill the carry trade that has kept stocks going.

This month’s stock plunge was triggered by fears that the Bank of Japan might hike interest rates, coupled with expectations that the Fed will cut rates in the near term due to the recession threat.

These analysts operated on the assumption that the central bank WANTS to save the US economy from substantial deflationary crisis and that they will happily print money forever in order to delay such an event.

This article was written by Brandon Smith and originally published at Birch Gold Group In 2022 there was considerable debate among alternative economists what the Federal Reserve was likely to do in the face of rising stagflation.

https://alt-market.us/carry-trade-trap-the-real-reason-why-the-fed-has-waited-so-long-to-cut-rates/