The Fed’s logic is illogical. It ignores the macro-economic factors of both inflation and GDP growth MORE than it acts on the phony “unemployment” figure, which we KNOW, with today’s low labor participation rate is more phony than a two dollar bill.
Some economists may say it is merely an “academic” error of the economic analysis staffs and leaders at the Fed, who are overwhelmingly eggheads from egghead city and not folks with “out in the economy” business or financial experience.
Others, like this article, may think the folks at the Fed are smarter than many know them to not be, and are just going to error on purpose, because of who is in the White House right now.
Having read more than one book lately on just how dumb so many at the top of the chain at the Fed are, I am on the fence as to their greatest problem - they are just too political, or they got where they are through the Peter Principle (rose to their level of incompetence).
For the powers the Fed has, they have it made even above politicians. They can make the most egregious mistakes, gravely harming the country, get away with it and suffer even less consequences than some politician who, because of their record, lose office and can’t get elected again.
I have learned enough since 2008 to understand that the Fed could have prevented the crisis, and instead chose to join the chorus of cheerleaders for the “new economy”, “affordable housing”, massively rising debt, and uncharted financial transactions (”derivatives and CDOs) amounting to more than the economies of the world), while they kept saying conditions were manageable, even when the first canaries in the coal mine had begun to sing.
All the top Fed officials should have been fired in 2008, not out of any partisan interest, but of the national interest. If they weren’t so stupid, they would have listened and respected a few dissident voices within, they would have been shouting with all their institutional strength at the rest of the federal government and taken their own fuel (low interest rates) off the housing bubble fire. By the time they did the bubble was already bursting, with its virus of subprime debt within.
America desperately needs more Conservatives of the right wing variety in Congress. We finally have a president who understands the seriousness of our problems. We are being strangled to death by a burdensome, evil bureaucracy that has swelled out of control.
When should they have raised rates to "take the fuel off the fire"?