With interest rates finally being raised on Wednesday, there...

With interest rates finally being raised on Wednesday, there’s a lot to look forward to in 2022 as well as the following decade. The FED has announced a 0.25% rate hike with what sounds like a target of 7 this year, leaving the target range somewhere between 1.75%-2.00%. What does this mean? It means money is becoming more expensive to borrow. This results in a tightening of the money supply in both the market and the economy. Borrowed money is permanently returned and removed from the system. To put it simply, imagine your credit card interest rate rising from 10% to 20%: you are not only less inclined to spend, but also pressured to pay off any outstanding debt ASAP. Hence the fear of money(outstanding debt) flowing out of markets and back to the lenders.

Exactly how much is 1.75%, and is it going to be enough to bring down inflation? Well, the inflation rate came in at a reported 7.9% last month. Most of us already know this number is detached from reality, the inflation calculation has been altered over the years to favor government irresponsibility. Using inflation calculations from 1980, the inflation rate would be at 16%. This sounds more reasonable and in line with the price increases we all have experienced. $S&P 500 Index(.SPX.US)$ $Dow Jones Industrial Average(.DJI.US)$ $Nasdaq Composite Index(.IXIC.US)$ $Invesco QQQ Trust(QQQ.US)$