Mary agrees with me too and look at this chart

Reading the comments from the Bloomberg interview with Mary Daly and I feel like I could have written her comments as she also now agrees with me that the recent rise in long term rates is doing the job further for the Fed. Also, something I’ve spoken about for a while now, just by keeping rates at an elevated level for a long period of time is itself a continued form of monetary tightening, especially as the rate of change in inflation slows.

“Importantly, even if we hold rates where they are today, policy will grow increasingly restrictive as inflation and inflation expectations fall. So, holding rates steady is an active policy action.”

“Likewise, if financial conditions, which have tightened considerably in the past 90 days, remain tight, the need for us to take further action is diminished.”