FED Pivots back to Restrictive Policy
October 5, 2026
By Mitchell Anthony
Overview
The Federal Reserve has become unhappy with the current level of inflation. The Fed action comes after more than two years of waiting for consumers to balk at the level of current prices, consumers however continue to spend despite constant complaints and the Fed has had enough.
The Fed stayed on hold for quite a while because of his belief that the Inflation is more cost push than demand pull but regardless the Fed will not tolerate the current level of inflation and has elected change course of past policy.
The bond market has been a house of pain for some time as rates have been rising steadily since 2022. With the Fed’s current action bond, investors again became sellers and Interest rates have risen in the market in anticipation of a policy that pushes rates about one hundred basis points higher over the next year.
The rising rates are a slap in the face of corporate borrowers who had been expecting relief after a sharp rise in rates in 2022 that hindered private credit markets and slowed down the pace of investment banking and LBOs.
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