First, the good news: The economy is doing so well that the Federal Reserve will increase the cost of money by 0.25 percent on March 15, up to the 0.75 percent-1.00 percent range. All Fed officials have been on the same page, rare unanimity.
- Global inflation has turned a corner, and no matter what, inflation is the first-response duty of all central bankers. The Fed sees ours as at its target.
- If long-term rates do not rise as the Fed hikes the Fed funds rate, then the Fed will either raise funds higher and faster, or dump its bonds and MBSs faster.