The Fed, Plainly: The Real Rate Does the Tightening
Most people watching the Fed are watching the wrong number. Earnings do not move the overall market; liquidity does. The rate that matters is the real rate: the policy rate minus expected inflation.
The Fed sets the first variable. The public sets the second. That means policy can change without a single vote. Hold the nominal rate while inflation expectations fall and the real rate rises. That is tightening even when the headline policy rate is unchanged.
A recovery gets strangled while the street says the Fed is on hold. Hold the rate while expectations rise and the real rate falls: that is easing. Same nominal rate, opposite policy. Belief moves faster than committees.
The question is not whether the Fed moved. It is what expectations did while it did not. Standing still is a policy. Source: RosannaInvests on X, September 12, 2026.