oj - What the Fed understands, and you and CNN ought to, is that when Fed policy is too inflationary it raises long-term (30-year) interest rates. When they then tighten to a more sensible policy, long-term rates decline. The decline of mortgage rates in response to increasing short-term rates is rational economics. The Fed tightenings are good policy.

pj:

What the Fed and you ought to realize is that it hasn't been inflationary, indeed can't be.

PJ - normally I'd agree with you but the yield curve is getting very flat as short rates move up and long rates hold steady or decline. Recently the forward curve showed the yield curve inverting (short rates higher than longer rates) later this year which has traditionally been a sign that the Fed has gone too far and a recession is coming.

AWW - Long rates are still 2 percentage points higher than short rates. They should be within about 1 percentage point. The forward curve inverts only because the actual yield curve rises steeply through 6 months. Let the Fed finish raising rates and announce it's done and that'll disappear.

oj - The Fed can always print money faster than productivity goes up. So it can be inflationary. There's a tipping point, and you don't want to cross it. There's no harm in slowly falling prices.

pj:

It would have to create money at an absurdly high level to combat global deflation and there's no reason it should.