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Fed Covering Its Fanny

By Richard Russell

 

Everybody and his brother are talking about when the Fed may raise rates, but few are talking about why the Fed may raise rates. But Richard Russell knows. The Fed will raise rates to protect its fanny.

 

Remember when Alan Greenspan let the housing market go crazy and then crash? Greenspan’s answer was that nobody can tell when things get too hot, but after they crash, we should simply clean up the mess.

 

With money from all over the world rolling into the dollar, and the dollar buying US stocks, the Yellen Fed is afraid of a buildup in the stock market and then a crash. So by raising rates, the Fed can say that it saw the market becoming overheated, and if the market then crashes, the Fed can insist that it raised rates early to calm down the stock market. Of course the Fed will never admit ... Log in or subscribe to continue reading.


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