Martin Armstrong writes in his blog
The US central bank has been in control of short-term rates, not long-term. The Quantitative Easing of 2008-2009 was all about reducing the supply of long-term debt in hopes of lowering long-term rates, which they hoped would revitalize the real estate market. Here, the Fed is dealing with its own perceived power. The mere fact that the Fed had to step into the repo market and continues to provide liquidity is an effort to prevent short-term rates from rising. It also reflects the reality that the Fed has lost control of interest rates. They will ultimately be unsuccessful in maintaining control over short-term rates on a sustained basis. We are entering a whole new dimension. This is not Quantitative Easing as so many immediately called it. They just lack the understanding of how the economy truly works both globally and domestically.
The Federal Reserve made no change to its target interest rate at its December meeting, expressly saying that the economy remains strong. They said that in fact the economy is so strong that few central bank officials currently saw any need to cut interest rates over the next 12 months. This is because the capital flows are still pointing into the USA while the rest of the global economy is showing major signs of stress. The Fed cannot lower rates when the pressures are for rates to rise due to risk factors nobody will talk about publicly.