I'm really wondering what the Fed's game plan is. Raising rates quickly and launching quantitative tightening in a globally weakening economic environment seems crazy.
The real problem to me though is that the fed interest rate no longer reflect reality. Who cares if it's 2% when people are paying 15-30% on their credit cards. If we really wanted to help the middle class, we should tie bank and credit card interest rates to a maximum multiplier, say no greater than 2:1 or something for secured debt, and 4:1 or something for unsecured debt. So a mortgage could only be 5% if the fed rate is 2.5% and a credit card could only be 20% if the fed rate is 5%.
Credit Card interest rates can be 1000%, as long as you pay off your statement balance in full before due date, it doesn't matter (cash advances notwithstanding).
That said, I do think that credit card interest rates are unconscionable and should be capped much lower. As it is, credit card debt is financial slavery and people should treat it like crack cocaine--just say no.
Unemployment is at record low and USD inflation is next to non-existent.