800 Dow Points—Not Even A Footnote In The Carnage To Come

America’s “low interest man” was at it again yesterday, chiding the Fed for it’s baby steps toward quasi-honest interest rates. Self-evidently, the Donald thinks the route to MAGA is via thoroughly crooked money rates—the kind that don’t even cover the cost of inflation and which help developers and speculators pay back their debts in depreciated money.

We are speaking of the chart below, which shows that for the past eight years running, the Federal funds rate (red bars) has been deeply underwater relative to CPI inflation (blue bars). Even with the Fed’s latest 25 bps raise to 2.13% in September, money market rates are still negative in real terms with the CPI running at 2.7% on a year-over-year basis.