The Rate Spike Will Damage The Recovery: Fed Intervention Needed

The Rate Spike Will Damage The Recovery: Fed Intervention Needed

Share to Linkedin WASHINGTON, July 31, 2019 (Xinhua) -- U. S. Federal Reserve Chairman Jerome Powell reacts during a ... [+] press conference in Washington D. C., the United States, on July 31, 2019. U. S. Federal Reserve on Wednesday lowered interest rates for the first time since the 2008 global financial crisis, amid rising concerns over trade tensions, a slowing global economy and muted inflation pressures. The Federal Open Market Committee, the Fed's rate-setting body, trimmed the target for the federal funds rate by 25 basis points to a range of 2 percent to 2. 25 percent after concluding its two-day policy meeting, in line with market expectation.(Photo by Liu Jie/Xinhua via Getty) (Xinhua/Liu Jie via Getty Images) There was quite a spike in interest rates the last week of February with the 10-Year T-Note spiking from a 1. 36% level as of the close on Wednesday to as high as 1. 60% intraday with a close of 1. 55% on Thursday. Friday's close was 1. 45%. But, a lot of damage was done. It is naïve to think this spike was caused by the inflation narrative, i. e., that rates would spike because of inflation expectations. The latest