A month ago, FOMC said they are worried about inflation and it is a matter of concern. This week, at FOMC meet fed said that they are worried about housing market slowdown. It sounds like feds worried about too many things yet they are symptoms. Underlying cause could be something else. Could the cause be something else?
Could it be Liquidity in the market. Is it that global markets, a stronger force than ever before would have changed the rules of game? Private equity is at peak, hedge funds are going long in the market. Is it that Feds can't easily control Liquidity anymore by just tightening the interest rates? Do they have to do something else to curb the liquidity in the market?
Or is it just fears and markets are taking it’s course and recession is no where in the sight?
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