Said another way, holding interest rates below inflation devalues assets relative to cash flows. If the gap is relatively small (e.g. 5-15%) then the economy c

Said another way, holding interest rates below inflation devalues assets relative to cash flows. If the gap is relatively small (e.g. 5-15%) then the economy can adapt to lower asset prices relative to cash. Workers get more margin, businesses invest in cash generating activities, speculative bets get hammered, asset returns are low. If anything I'd say this exercise shows the limits of Federal Reserve power. Without the tight labor market of the pandemic, low interest rates simply raised asset prices. We should take the lesson that the fed should not be solely responsible for driving the economy.