Is Federal Reserve lying to us?

The Federal Reserve has been grappling with several significant challenges since 2021. However, the recent developments suggest that the Fed's credibility is at stake. At first, the Fed assured that the interest rates wouldn't rise until 2024. But this month, the rates hit a 16-year high, indicating an alarming development.

The Fed then claimed that the rising "inflation was transitory". However, the inflation rate surged to a 40-year high near 10%.

The Fed said that we are in disinflation. Inflation has remained at 5% or more for straight 23 months, putting the Fed's policies under scrutiny.

Moreover, the Fed reported yesterday that the "banking system was sound". But the regional bank stocks hit a 2-year low, with multiple banks plummeting over 40% today.

This development has once again raised concerns over the Fed's credibility and ability to manage the country's financial affairs.

The past two years have been tumultuous for the Feds and the market. The Feds have lost all of the credibility.