says<\/a> that the Fed will surprise people and continue to raise interest rates.<\/p>\nLong says her prediction is based on her view that inflation is once again rearing its ugly head.<\/p>\n
\u201cThe FED is going to keep raising rates. I think they\u2019re going to surprise people with how much they\u2019re continuing to raise rates to try to get inflation under control\u2026 <\/em><\/p>\nI don\u2019t believe the consensus is correct because inflation is picking back up. Those who forecasted inflation to pick back up have been proven right at least in the short term, and there\u2019s some very interesting data underlying what\u2019s going on.\u201d<\/em><\/p>\nAccording to Long, corporate America is still flush with cash as they making the rising interest rate environment work in their favor.<\/p>\n
\u201cI used to work with corporate treasurers during my Wall Street career and the corporations locked in low long-term interest rates so they\u2019re probably borrowing at about 2% and they\u2019re earning 5%-5.25% on their cash by just keeping it in T-bills (treasury bills) or money market funds. <\/em><\/p>\nSo these big corporations are actually getting richer. They\u2019re getting bigger as a result of their really effective corporate treasury strategy.\u201d<\/em><\/p>\nWhile big companies are taking advantage of the Fed\u2019s higher rates, Long goes on to say that other sectors of the US economy are already in the midst of a recession.<\/p>\n
\u201c[The recession is] already happening in certain sectors. It\u2019s already happening in the labor markets, but recognize that it\u2019s very tilted, it\u2019s very unbalanced. What I just described, these large corporations getting richer, it\u2019s the old phrase that \u2018The rich have assets and the poor have debt.\u2019<\/em><\/p>\n As the FED continues to raise rates, the rich are getting richer because they\u2019re the ones that are owning these T-bills that are paying 5.25% risk-free right now.\u201d<\/em><\/p>\n