Psychopaths do that ...
Not sure what the author does not get here. The Fed raises rates to slow inflation. It has done some rate hikes and these have slowed inflation to some degree, but not enough to bring it back down to the level of 1-2% that is historically the norm. More slowing of inflation is needed, hence more rate hikes
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Inflation isn’t “cooling.” Inflationary cycles don’t just pop like the “bubbles” everyone has gotten accustomed to.
Going from 7.9% to 6.9% is still a disaster, not a reason to celebrate.
Current inflation has not been caused by an overheated economy, but by scarcity and devaluation of the dollar. Input costs (fuel,feed, fertilizer) are still rising.
There is no bubble to pop, and we’re still doing exactly what we did to get here. Nothing changes until fundamentals - like collective behavior and leadership - change.
Stagnation is the word in 2023. The fed can only battle so much when congress spends like crazy. A recession will further bring out the siren cry of more spending to help the unemployed. Rising gas prices will help spur the ebb and flow of inflation data.
Interest rates are negative. If the economy is unable to support the payment of a positive, real interest rate to the safest of bonds, it is in an economy that is very unhealthy. A healthy economy is key to a healthy country and society. Interest rates have been negative for those bond holders for the majority of the last 20 years.
The Fed is doing the right thing. <P.
If Biden doesn’t like it, he can ramp up oil production to what it was during the Trump years and cut billions in environment regulation. That would reduce inflation without the need for interest rate hikes.