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Not exactly true on inflation. If inflation gets above 2.5% for example, they'll raise interest rates. They're explicitly targeting 2%. Bernanke has stated this
by loc779 15y ago
Not exactly true on inflation. If inflation gets above 2.5% for example, they'll raise interest rates. They're explicitly targeting 2%. Bernanke has stated this repeatedly. You're underestimating the power of the Fed and its control of the money supply to curb inflation.
- T_S_ 15y agoThe fact is that control systems break down sometimes. The Fed doesn't even use very good inflation indicators. (E.g. housing component of CPI). It seems pointless to limit the support of the distribution the way you suggest in order to make argue the absurdity of the parent post.
- loc779 15y agoYou use any index to measure inflation. What index do you prefer, and how would you measure inflation? The fact is inflation will not go into hypergrowth mode (or even above a few percentage points of what the index gives you), which I assume the poster above is assuming. The hysteria over massive inflation is extremely overblown, and profiting on high inflation is not the best strategy when you're investing billions.
- deleted 15y ago[deleted]