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I'm by no means well-educated on finance. However, it seems like inflation has been the boogeyman of every major policy decision in the US for the decades I've
by ergothus 9y ago
I'm by no means well-educated on finance. However, it seems like inflation has been the boogeyman of every major policy decision in the US for the decades I've been watching. So far, the dire predictions haven't come true, but we've faced growing wage inequality for 30 years.
I've read that the Fed has a dual mission - keep inflation/deflation in check and unemployment at healthy levels, but I only ever hear their concern for inflation risks.
As a result I tend to discount concerns over inflation, assuming that the major problem will be the issue we aren't addressing...is my reaction reasonable?
- sidibe 9y agoAll central banks have been focused on the other issue since 2008. No one has been very worried about inflation until very recently.
- ergothus 9y agoBanks, perhaps. Everyone else (conservative pundits, fiscal pundits) seem to be declaring imminent crippling inflation on a regular basis, yet it never seems to happen, even when the banks/govt take the action (or don't take the remedy) to this threat. Qe1 and Qe2 in the US were both accompanied by much hand wringing and doomsaying (for example), but the logic of the fear never made sense to me.
- Godel_unicode 9y agoThe Fed has used both lack of employment growth and lack of wage growth multiple times to explain holding off on raising rates.
- ergothus 9y agoYes, but they've also raised rates a number if times in the last few decades over -fears- of inflation that wasn't yet present, even with employment/wages weak. The Fed tries not to screw employment up, but I've not heard if them taking action to impact employment while they will for inflation. Even when inflation is too low by the Fed targets. All of this, however, is my only lightly informed opinion so I am open to being shown any errors.