The price of oil and inflation are all due to lower fed fund rate. I think what the fed is trying to do is to quickly (if they can) stabilize the credit market and start to increase the fed fund rate in hope of stabilize the inflation.
One has to understand that the fed does not really have a lot of tools to maneuver the economy but we are facing two polarized problems – inflation and recession. No one can address both at the same time. I feel what they do is understandable and reasonable although I am not sure if it will work. From this, we also notice that the Fed realizes the problem is huge and they have to address this issue immediately with all of the tools they have. That is my thought.
