@NBS "policy error" ... markets are pricing in the perception that the fed has made a mistake and will have to cut rates down the line.
I understand that everyone is up to their necks in debt, and that the market can only sustain minimal hikes before widespread bankruptcy and "contagion"...
what I don't understand is:
a) what is stopping the fed from sustaining these hikes, and damn what the markets are predicting?
b) what possible course other than sustained low rates would not be seen as policy error? is there some magic pace of rate hikes that the market would nod sagely at and start to pay down what they owe?