Mobius warns rates will go to 9% if inflation persists

Bloomberg/Vildana Hajric and Guy Johnson/10-17-2022

“The Fed is under pressure to handle the hottest inflation in 40 years after last week’s reading of September consumer prices came in above expectations. Other inflation readings have also remained elevated despite the Fed’s recent rate increases.”

USAGOLD note: With all due respect, it will be a very long time, in our view, before we see interest rates near double digits. You could drive a tank through the current gap between the fed funds rate and headline inflation. It would take nine 0.75% rate increases to close that gap as it stands.

Fed funds and headline inflation rates

Chart courtesy of TradingView.com