By Richard Russell
The initial shock hasn't dawned on the public yet, but it will. The reality is that the U.S. is sinking back into recession. I think we have reached the inflection point, and the bad news is coming out. This will obviously terrify the Fed, which has been trying with all its might to push up core inflation to the much desired 2%. Soon I think the newspapers will start breaking the disturbing news: the fact that the US has sunk back into recession after six years of pumping by the Fed. So what's next?
The Feds raising rates is out of the question. What's more likely is the return of QE, because the Fed is terrified of the current position in which deflation is taking over from the much desired inflation. It would not surprise me to see QE4 established as the Fed addresses the deflationary trend.
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