The Fed's Moment of Truth

The very small increases to the overnight rate have thrown markets into a tizzy.  The rubber starts meeting the road this month as the Fed's previously stated schedule for unwinding its very large balance sheet ($8.9 TRILLION dollars) begins this month.  This will have far more impact on markets than the tiny rate increases that it has approved during the past six months.  The pace that is being proposed for rate increases and quantitative tightening will not bring much relief from the present rate of inflation.  Some price increases in food are already "baked into the cake" as farmers contract for fuel, seed and fertilizer a year in advance and have seen very large increases in the costs to produce a crop.  Those increases generally show up on the consumer's end bill a year to eighteen months later.  One Texas farmer estimated that by 2023, Americans might see their grocery bill double from current levels.

A large number of voters have Democrats, the Federal Reserve and their own greed to thank for the clusterfuck that they find themselves in today.  Embrace the suck.