Here in Part 2, Fed-watcher Danielle DiMartino Booth explains why the Fed is guaranteed to make a policy mistake no matter what decision it makes here. Taper or tightening interest rates will lead to an economic slowdown or recession that will pop the current bubble in financial assets. A continuation or resumption of monetary stimulus will worsen the growing inflation problem.
Markets will be the collateral damage to the Fed’s decision. Whichis why Danielle recommend investors get defensive and, at the very least, start hedging any long positions they hold.