No, you are going in circles. I am telling you the straight economic facts of life.
Of course you're right that the state of the economy has everything to do with the business cycle, just as the business cycle has everything to do with the state of the economy.
No, you are incorrect. Each is not the cause of the other. The business cycle iteself carries the greatest weight of all reasons for the current state of the economy. The USA's economy playes second fiddle to other factors that dictate the current state of the economy, since our economy is part of the world economy and the business cycle is global in nature.
The Federal Reserve can (and usually does) have everything to do with the state of the economy . . .
Simply not true.
because it affects business cycles by mananging short term rates
No, the Fed does not manage short term interst rates. Those who say that imply that the Fed makes short term rates go up and down. The Fed is REACTIONARY. The Fed REACTS to market rates and then adjusts rates to reflect what is already happening in the market. The reason why rates go up and down is due to market forces, then the Fed reacts to market forces by adjusting the Fed Funds rate or Discount rate based on what they see happening in the market.
Well excuse me Mr. Friedman.
The business cycle iteself carries the greatest weight of all reasons for the current state of the economy.
D'ya just finish reading a book on business cycles? You are looking up from the bottom of a well. Certainly there are business cycles but they are by and large the result of extraneous factors. No two cycles are ever alike, just similar. Don't get so hung up on the concept of business cycles that you lose the big picture.
No, the Fed does not manage short term interest rates. Those who say that imply that the Fed makes short term rates go up and down.
Boy, you got some studyin' to do. You are right, the Fed doesn't make short term rates go up and down, it SETS short term rates by pegging the benchmark Fed Funds rate. You really have this all wrong.
The Fed doesn't so much react as anticipate. Greenspan,for instance has a few favorite indicators that he watches, Personal Consumption Deflator is one, for anticipating inflation. This isn't reactionary at all. If the Fed were purely reactionary it would always be late (later than it is). Back when Wayne Angel was a governor he used to write articles about the price of gold being a future indicator. This isn't reacting to inflation but anticipating it.