HEATH MUCHENA: Look at who is really running the world’s largest economy
Raising interest rates by half a point is not going to stop Washington from spending like there’s no tomorrow
For most of modern history, the US’s economy moved to the beat of the Federal Reserve. A small tweak to interest rates here, a quiet shift in lending policy there — and markets, businesses, and consumers would all respond like clockwork. The Fed was the maestro. The economy was its orchestra. But today, the sheet music has changed. We’re entering a new era — an era where fiscal policy, not monetary policy, calls the tune.
In this world, it’s no longer a question of whether the Fed cuts or hikes rates by a fraction of a point. It’s about how much Washington spends, how big the deficit grows, and what kind of tariffs or subsidies get rolled out next. ..
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