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Hiking interest rates during a supply shock might be counterproductive, but there are plenty of things the Fed has already done to push inflation higher than it would otherwise be, and it has already helped the surge in home prices and stock prices. The Fed intends to aggressively taper the infusion of electronic dollars into the system at a rate of $15-20 billion per month. We are already seeing the positioning for this tapering in both stocks and bonds. Increasing that taper rate can push rates higher and stocks lower.
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