Comments by "Daniel Bradford" (@Falconlibrary) on "Fed will likely cap rates around 3.5%: Rockefeller Capital Management's Greg Fleming" video.

  1. The wild card, of course, is inflation. If it continues to be high, the Fed is going to have to raise interest rates a lot higher. Right now, they're not high enough combat this level of inflation. If you factor in housing, the inflation rate is about 12.5%, not 8.6%. The next inflation update is scheduled for release on July 13 at 8:30 a.m. and I predict it'll show that inflation is either steady at 8.6% or even a bit higher--and 8.6% is a ruinous number over the long-term. The problem with our current inflation is that monetary policy won't have the effect on it that it once did, since a lot of it is driven by chronic supply side problems (shortage of commodities and labor). The CBO, which has a very good track record in these matters, has projected that inflation will remain high into 2023. To paraphrase a Seinfeld episode: "That's not gonna be good for stocks. That's not gonna be good for anybody."
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  2. The CBO, which has a very good record in these matters, has projected inflation to be high into 2023. Mortgage interest rates are 6.6% right now and inflation is 8.6%. Interest rates have to be two points above inflation in order to bring inflation down, which means rates need to go MUCH higher. You couldn't be more wrong. You could try, but you would not be successful.
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