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Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market

Forward Guidance

NOTE

War Spending Shapes Risky Assets

The Federal Reserve's current approach reflects a historical precedent where it took a back seat during crises, akin to its role in World War II. Unlike the 1951 Treasury-Fed Accord that established independence and proactive measures against economic excesses, the Fed today appears reluctant to intervene, prioritizing avoidance of accountability should the situation deteriorate. This absence of intervention implies that ongoing wartime spending will inevitably impact risky assets, highlighting a complex dual-sided interaction in the economic landscape rather than a unidimensional analysis.

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