The Fed’s rate lever is breaking as bond markets stop following its lead
The post The Fed’s rate lever is breaking as bond markets stop following its lead appeared on BitcoinEthereumNews.com. For decades, the Fed stabilized the economy with one simple tool: interest rates. Raise them to cool inflation, and cut them to stimulate growth. But after years of massive government borrowing, post-pandemic inflation, and repeated stress inside the Treasury market, that system may no longer work the way Americans expect. Today, the Fed can cut rates while long-term borrowing costs stay elevated, mortgage rates remain high, and bond markets react as if the central bank is losing control of the financial system’s most important lever. At the same time, it has also resumed expanding parts of its balance sheet again to support market liquidity, raising a bigger question on Wall Street: if emergency support is still needed during relatively calm periods, what happens during the next real crisis? The Fed controls less than you think Most Americans are familiar with a simpl