In what could be described as a delightful dalliance with the dark arts of manipulation, the Federal Reserve is being urged by some of its former members to deploy a time-honored trick typically reserved for taming tots’ tantrums: reverse psychology. Indeed, the strategy employed by weary parents to cajole little Johnny into eating his vegetables or persuade darling Sally to tidy up her toys may soon be unleashed upon the unsuspecting, though not entirely innocent, global financial system.

This cunning stratagem is implicitly being proposed by a medley of former vice chairs of the Fed, as reported by Harvard economist and erstwhile Council of Economic Advisers chair Jason Furman. Their underlying premise, according to Furman? That pausing interest rate hikes could, against all logic, increase financial instability by inadvertently raising red flags about the economy’s frailty.

The market, one might assume, would sniff out such sly scheming like a petulant adolescent catching a whiff of their parents’ deceit. Yet Furman admits that upon encountering this argument for the fourth time, one cannot help but entertain the possibility of its merit. He also warns that holding off on rate hikes might foster “another disconnect between market expectations and future rates — and so more accidents.”

If the Fed takes their advice, it’d almost be as if it’s coyly suggesting to the markets, “You know what? Go ahead and tank. It’s fine. Really. We’re totally cool with that.” At which point the market, like an obstinate child, might just decide to rally out of pure defiance.

And you know what? Most interest rate traders think that’s just what the Fed is going to do. As of Tuesday, the odds of a 25-point hike are up to 83%, according to data from CME Group
CME
. It was 70% one week ago.

We’ll find out Wednesday if they decide to unleash the ultimate parental weapon.