Can't Leave, Never Leaving

Relax, said the night man
We are programmed to receive
You can check out any time you like
But you can never leave
--Eagles

Long term chart of Fed Funds rate. Beginning in 1960, the trend was higher--culminating in a peak above 20%(!) as then Fed chair Paul Volcker famously raised rates to 'break the back' of inflation that gripped the US economy during the 1970s.

Since then the trend has reversed. In each cycle, rates never return to the previous cycle highs. The culmination of this cycle has been a near 10 yr period with rates close to zero--followed by a feeble few raises that the Fed recently walked back.

The Fed is stuck in a roach motel of its own making. Easy credit policies have created so much leverage in the system that even the smallest uptick in rates threatens to blow up the world.

Unfortunately, by never leaving its Hotel California monetary policy, the Fed is likely to blow up the world as well.