Comments by "DiewConklan" (@hRt42kuo7jTtmk14) on "Markets Not Prepared for Fed Hikes: Wharton's Siegel" video.

  1. Regardless of what the Fed does with interest rates, bond yields at 3%-4% are no longer beating inflation. And that’s a serious problem for fixed income investors. Eventually bond investors will demand higher yields from bonds to at least match inflation or they may no longer be willing to buy them. If inflation remains at 6% going into Q2/Q3 of 2022, I can see bond prices coming down a lot in order to attract bond investors because by then demand for bonds could start really drying up.
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  2. If history is any indicator of future outcomes then we could see rates between 7%-12% within the next 18 months in order to stop this runaway inflation. If anyone thinks an interest rate bump to only 1.75% percent is going to stop this inflation problem then they are dreaming. Those kinds of small increases never had any effect on rising inflation when inflation was at these same levels back in the 70s and 80s. And at some point the Fed is going to have to step up and stop inflation from running away because that’s their job, regardless if a big jump in interest rates might hurt economy. If they plan to really stop inflation then they will have to live with the impacts of whatever raising the rates will have on the markets. They can’t have it both ways.
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