The Fed could lose credibility
The Fed vowed to fight inflation by raising interest rates and decreasing the size of their balance sheet. If the markets and the economy keep tanking, as has been the pattern so far this year, the Fed may suddenly pivot, reverse course (again), and break their vows. It could shatter their credibility. That’s a big deal in the world of finance. It could lead to real chaos, with wide swings in the prices of assets. Capitalist instability. The elites hate that.