The damage is already baked in the cake. Two (or arguably even three) decades of artificially low interest rates have produced unsustainable levels of debt throughout the economy (both in the public and private sectors) and have enabled the FedGov to spend far beyond its means. The politicians in both parties will not stop deficit spending until the bond market forces them to with much higher rates. But if/when that happens, it will create a lot of damage too.

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There's a similarity between "defund the police" and markets.

If the police are defunded, it would correspond to a rise in vigilantism.

Markets already have vigilantes. Fortunately they do only monetary damage.

The problem in both cases is that society should make up its mind: Police or vigilantes?

The Fed or "bond vigilantes?

Life would be smoother for all of us if we could only decide. And stick with it.

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