Special thanks to our friend, macro maven Brian Yelvington for his contribution to this piece
On the seventh anniversary of the implosion of Lehman Brothers, an event that rocked the global economy, it’s more than ironic that the main topic of global financial discussion has been a rate hike by the Federal Reserve. Behind the scenes, more interesting is the growing list of risks which may be tying the FOMC’s hands behind their back.
The Fed should have hiked rates in 2012, but every day they put off the rate raise, Lehman-like systemic risk is lurking and rising. It’s a Colossal Failure of Common Sense all over again.
With all the debate about what exactly the Federal Reserve should do with short-term interest rates, historical perspective is something that’s being left behind.