Your Survival Guy is all for Fed Chair Kevin Warsh’s quarter-point rate increase yesterday, especially because it earned unanimous support from all 12 members of the Federal Open Market Committee. Short-term interest rates have been too low for too long and, shockingly, the market is finally coming around to see that this increase wasn’t the disaster so many predicted.

At the end of the day, interest rates beyond what the Fed directly controls will be set by the market. And isn’t it telling that, after the increase, it’s pretty quiet out there this morning?

When you look at the run we’ve seen in commodities, it’s easy to understand how inflation has eroded the purchasing power of savers and, for that matter, just about everyone else.

Action Line: This is a smart move by Warsh. That doesn’t mean I’m sticking my neck out, but so far, so good. When you want to talk about bonds in your portfolio, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.

Originally posted on Your Survival Guy.