As readers are already aware, there’s always lots of speculation and panting by the deep-in-thought ahead of interest rate decisions by the Federal Reserve. But rather than fill many books with just how absurd the notion of central credit planning is, how about we just reduce it to the absurd: what if the Fed had raised the funds rate to 36% last week? Would it mean anything? No, not really. Think about it.
Does anyone seriously think Jeff Bezos would have to pay 36% in order to borrow at the Fed’s artificially arrived at rate of interest? Hopefully the question answers itself, but if not the obvious reality is that Bezos wouldn't even pay anywhere close to the present 5% rate that the Fed arrived at last Wednesday. Billionaires borrow much more cheaply than you and I do.
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