A lot of analysts put excessive weight on interest rate activity. Especially when rates start rising into reasonable territory (closer to the inflation rate), t

A lot of analysts put excessive weight on interest rate activity. Especially when rates start rising into reasonable territory (closer to the inflation rate), the effect tapers. For example, if the Fed raised rates to 100% tomorrow, it would be almost the same economic effect as if they raised it to 1000%. It would essentially just stop all borrowing in the affected channels and cause banks to reduce lending to the point where they don't find themselves needing to take a reserve loan and pay that rate. Arthur Hayes did an entertaining write-up of some of the other factors the Fed can use, two of which are either not being leveraged or actively conflicting with the interest rate hikes [0]. We could guess at political motivations for going soft on inflation until the election (while appearing to be hard on inflation) and then really ramping it up (including finally reducing the Fed's balance sheet and ramping up reverse repo sizes) in November when inflation continues, predictably, because the Fed keeps expanding its balance sheet and interest rates are still low (relative to most of its history). [0] https://blog.bitmex.com/teach-me-daddy/ https://blog.bitmex.com/teach-me-daddy/