Minority Mindset: The Fed JUST Said They WANT To Crash the Market
The resumed selloff in the stock market has caused indices to retest their February lows. Many stocks have fallen further. But the pain may not be over yet. Not by a long shot.
That’s especially true as Fed officials have come out in favor of stronger interest rate hikes in the coming months. The reason? To crush inflation. The short-term impact? Crushing the stock market.
On the Minority Mindset YouTube channel, investors can find a clear overview of how we got here. The Fed stepped in with money printing to save the stock market in 2020. Interest rates remained too low for too long. And inflation crept up as newly-printed money gradually circulated throughout the economy.
Now, inflation is racing ahead at multi-decade highs. While direct stimulus programs are over, prices continue to rise as supply chains remain constrained. And to keep the growing economy from overheating, the Fed now needs to apply the monetary brakes.
To do so means causing bond yields to rise, so prices will fall there. And higher interest rates mean a higher cost to borrow money. So stocks will likely go down as businesses and traders step back on their most aggressive moves.
A stock market crash may not reflect the fundamental economy. But the Fed’s latest announcement is tantamount to a plan to crush stocks in order to crush inflation.
To watch the full video and see the implications of the latest change in Fed policy, click here.