Expert: To stop inflation, the Fed would need to hike rates to nearly 6%

Interactive Brokers founder Thomas Peterffy is worried about the higher interest rates coming soon from a Federal Reserve behind the curve on inflation. If the Fed really wanted to stop inflation, it would have to raise rates upwards of 6%, Peterffy says.


Brian Sozzi at Yahoo Finance:

“I am worried about high interest rates because the Fed is talking about raising rates to 1% or even 2%. Inflation is 7% — 1% or 2% doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%,” Peterffy said on Yahoo Finance Live.

Peterffy thinks the Fed wouldn’t go that high on rates (yet) as it would add new deficit spending as servicing costs on the country’s ballooning debt would rise. More money would then likely circulate into the economy, and put more upward pressure on inflation, Peterffy reasons.

“I think they [the Fed] are in a box. They can’t raise rates much above 1% or 2%, and inflation can stay up there for a long time and people will get used to that and it will become endemic. So that is the reason for my fears,” added Peterffy.

The Bureau of Labor Statistics’ December CPI reading showed prices rose at a 7.0% year-over-year clip at the end of 2021, marking the fastest increase since 1982… and accelerated from November’s already elevated 6.8% increase.

Within the report, the food at home index rose 6.5% over the last 12 months, compared to a 1.5% annual increase during the last 10 years.

The tech heavy Nasdaq Composite fell into correction territory on Wednesday, defined as a 10% drop from a high.

MacDailyNews Take: Obviously, a healthy U.S. economy, consumer confidence, and consumer spending are essential to Apple, as America is Apple’s largest market, by far.

‘Tis best to get a handle on inflation, if you know how, while you still can.MacDailyNews, May 11, 2021

Inflation is repudiation. — Calvin Coolidge

When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan

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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. Inflation is the worst of taxes because how slowly it eats away one’s income. It is death by a million paper cuts. Most people simply don’t recognize it as a tax just as most people don’t recognize dollars for what they also are: a commodity (the more there is, the potential to lose value).

  2. In addition, MDN…low interest rates are/have been an Apple “essential”, as borrowing $$ has been the company’s method to finance stock buy-backs…of which the company is the absolute leader of ALL per buy-backs.

    This is one specific that simmers a growth stock in such times, as borrowing costs have the effect of curtailing future growth.

    1. Good point though Not all buybacks have been borrowed money, they didn’t need to. They’re borrowing against the overseas existing cash and growing cash. They can’t bring that 120 billion back to corporate US else get double taxed (Apple and all the others waiting for the repatriation holiday). But no doubt the Last 2 years the borrowing (Apple Bond issuances) have been sold at comically low rates (I think 2% if averaging all three time lengths). Those rates are in effect free money for Apple.
      But Apple bonds now total almost 100 billion (debt). Apple going much above 100 billion will have Wall Street getting nervous about the debt ratio.
      Also to note the dollar’s exchange rate against the basket (DXY) has gone up quite a bit as inflation has risen. If Apple’s money overseas is in local currency, that negatively effects the cash level and profit level overseas

    1. Goldman, you mean Rod Hall the Apple analyst at Goldman, often was (no longer is) referred to as The Apple Bear? If that’s who you’re referring to then you’re right and wrong saying expert idiot. Rod Hall is an idiot for being an adamant Apple Bear for 3 straight years as the stock skyrocketed, totally widely known public embarrassing humiliation. But his expertise is in stupidity. It’s a subtle difference between idiocy and stupidity but for him it is there 🙂

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