Not necessarily. In fact, rate hikes can actually fuel inflationary pressures in this macro environment.
Rate hikes are meant to cool private demand, but they also raise Treasury interest expense as debt rolls over.
If that isn’t offset by spending cuts or higher revenues, deficits widen and more interest income flows into the private sector.
Higher Treasury yields can also pull capital from equities, pressure stock prices, reduce realized capital gains and tax receipts, and widen deficits further.
That can raise fiscal sustainability concerns, pushing long-term yields higher and driving interest expense up even further.
With debt and deficits this large, the fiscal consequences of higher rates are now big enough to significantly impact economic activity and inflation expectations, offsetting the Fed’s efforts to tighten conditions and bring inflation down.
That’s the fiscal dominance feedback loop, and it's why inflation can remain sticky even as the Fed keeps hiking rates.
25 years ago today Welles Crowther gave his life helping others on 9/11. This is the best story @espn has ever done. Share it with your kids and any others who may not have been alive on 9/11 and don’t know what true bravery in the face of evil is.
Wow, what an insane day.
The Dow just plunged 1,700 points... that's the fifth largest point loss for the Dow IN HISTORY!!!! 😱
Meanwhile, Nasdaq, S&P 500 saw its worst sell-off since 2020!!
It's hard to imagine it could get worse from here, but it's certainly possible...
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I’m feeling generous today. Retweet this and make sure you’re following me. I’ll pick 2 lucky winners on Sunday evening 👌
Today is a Sports Equinox for those who celebrate.
For the 27th time ever, the NFL, MLB, NHL and NBA are all playing on the same day.
There are also two MLS postseason matches tonight.
Today is a good day.
🚨 NEW PROGRAM RECORD! 🚨
For the first time in school-history, the Niners have climbed up to ‼️ #15 ‼️ in the polls eclipsing the old mark of #18 set back in 2007!
#GoldStandard | #9ATC
Almost a year from the date of the original first pitch, Atrium Health Ballpark will debut as a baseball field for the first time when the @Charlotte49ers welcome @appstate in a Division I, non-conference match-up on 3/23 at 6:00 p.m.
Read More: https://t.co/O55KJo7iae
FINAL!!!! DOWN GOES #14!!!!
The Niners SHUTOUT #14 Tennessee with dominant pitching, 4 HR's including back-to-back-to-back!
✅First Home Win over Ranked Opponent since 2018
✅All starters record at-least one hit
✅Snap UT's 14-game midweek win streak
#GoldStandard | #9ATC
Thank you @RepRichHudson for all that you do for our men and women in uniform.
We appreciate your sincere gesture to honor Officer Shuping, his family, as well as his brothers and sisters in blue.