ZIRP Now. ZIRP Forever. Viva ZIRP!
GUALFIN, Argentina – Well, it’s ZIRP now. ZIRP forever.
Viva ZIRP! Viva! Viva!
As we suspected, Janet Yellen did not want to risk raising the federal funds rate. Bloomberg reports:
Federal Reserve officials left interest rates unchanged, opting to delay an increase amid stubbornly low inflation, an uncertain outlook for global growth and recent financial-market turmoil.In holding their benchmark federal funds rate at zero to 0.25%, policy makers showed they are still not convinced inflation will move gradually back to their 2% target, despite continued gains in the labor market.
Punish the Savers!
It is only small businesses (who don’t have access to the ultra-cheap money)… honest members of the middle class (who have to work in the Main Street economy)… retirees… and savers who might like to see it stop.
And even they are often caught up in it – with student debt, car loans, and oversize mortgages.
Like viewers hooked on Game of Thrones, they have to see what happens to the dwarf!
The longer the distorting policy remains in place, the more people have adapted their lives to it… and the less they are able to bear the pain of giving it up.
At some point, the policy becomes impossible to change. You just have to stick with it… even as it leads you to a disaster.
That’s what hormegeddon looks like.
And that’s the show we are watching now.
Reprinted with permission from Bonner & Partners.
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