The Emperor’s (AKA The Fed) New Clothes (AKA Stable Interest Rates)

So Wall Street is sure that the Fed will peak interest rates (Fed Funds) at no more than 5%. Whew!

This optimism that interest rates are peaking is based largely on the hope that the 6-month decline in the CPI from 9.1% to 6.5% will continue. I question this based on metrics from David Stockman who predicts higher interest rates noting that all the decline in the CPI has come from narrow portions of the CPI such as volatile oil/energy prices which co…