by David Haggith
GoldSeek
The Fed’s financial plans are running off the rails already. With summer just gone by and the Fed’s first rate cut barely out of the station, already the bond vigilantes are pushing bond interest rates back up, and voting Fed members are already talking about stalling their future rate cuts—all due to inflation being back on the rise. The timing of inflation’s arrival is as I expected, but it is not at all what the Fed was hoping to see.
Bond investors are referred to as “vigilantes” when they bring true justice to interest rates by going in the opposite direct of what the Fed intends because keeping the market in sync with reality demands it. They do this when they smell inflation stinking up the air like a dead rat in the walls of the house because they don’t want to lose to inflation as they wait to maturity to get their money back out of bonds.