Since 2004 the Fed has raised short-term interest rates in numerous baby steps, but--and this is key--it has failed to mopup the excess money it created.
Since 2004 the Fed has raised short-term interest rates in numerous baby steps, but--and this is key-- it has failed to mopup the excess money it created.
If the Fed truly wants to tighten, there's an easy, time-tested way to do it: sell bonds from its portfolio to mopup the excess money it's mistakenly spilled onto the financial markets for the past 18 months.