Good article. Good points. The Fed's actions are curious and hard to understand against the background of history. A president who will lift tariffs and run a stimulative policy is on his way in. Inflation has been over target for 44 months in a row, and inflation expectations (U of M series) have risen sharply, especially the mean of that series. Yet the Fed professes fealty to the 2% target and then does the least it can to hit it. The Fed argues that rates are high enough and restictive even though growth is firm to strong, the unemployment rate has been rising but is still historically low, and the evidence 'out your window' as it were is that restrictive or not there is nothing being restricted and inflation has stopped falling. We are not in the land of Fed believe; but of make-believe.
I am completely dumbfounded by the Fed’s obstinance in sticking to this plan when it violates one of the most important lessons in financial history AND current data reveals it isn’t working. I used to hold out hope that they would get lucky and the short term data would continue to trend in the right direction. If it didn’t, I figured they would abandon the rate cuts. I never imagined that the data would trend in the wrong direction and they would resort to denial. It is really exasperating to watch.
Good article. Good points. The Fed's actions are curious and hard to understand against the background of history. A president who will lift tariffs and run a stimulative policy is on his way in. Inflation has been over target for 44 months in a row, and inflation expectations (U of M series) have risen sharply, especially the mean of that series. Yet the Fed professes fealty to the 2% target and then does the least it can to hit it. The Fed argues that rates are high enough and restictive even though growth is firm to strong, the unemployment rate has been rising but is still historically low, and the evidence 'out your window' as it were is that restrictive or not there is nothing being restricted and inflation has stopped falling. We are not in the land of Fed believe; but of make-believe.
I am completely dumbfounded by the Fed’s obstinance in sticking to this plan when it violates one of the most important lessons in financial history AND current data reveals it isn’t working. I used to hold out hope that they would get lucky and the short term data would continue to trend in the right direction. If it didn’t, I figured they would abandon the rate cuts. I never imagined that the data would trend in the wrong direction and they would resort to denial. It is really exasperating to watch.