Bernanke won't be able to "pause" without crashing the bond markets...until say around...6% on FED funds and then it will all depend on the US "twin deficits"...are they getting better, (LOL) or worse...?
If the war is still raging and the K-Street Kongress is still spending...Bernanke will keep raising rates.
Amazingly, if the Democrats take one or both Houses of Congress...in November...My hunch is that the prospect of a "change of direction"...especially on the outrageous tax cuts...will boost bonds and the dollar...THEN AND ONLY THEN WILL BERNANKE BE ABLE TO PAUSE...
SO, A DEMOCRATIC SWEEP IN NOVEMBER IS "GOOD FOR WALL STREET!" GO FIGURE!!
Because there is NOW an entire school of thought that says: LOWER TAXES ARE NOT ALWAYS GOOD FOR THE ECONOMY!!
All you have to do is be old enough to remember the Clinton Years to see the logic of this...!
More on this notion of raising taxes to prosper...later.
