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> The Fed is barely doing anything, That is really not correct. The Fed has engaged in four phases of Quantitative Easing (https://en.wikipedia.org/wiki/Quanti
by wolframhempel 4y ago
> The Fed is barely doing anything,
That is really not correct. The Fed has engaged in four phases of Quantitative Easing (https://en.wikipedia.org/wiki/Quantitative_easing#United_States https://en.wikipedia.org/wiki/Quantitative_easing#United_Sta...) since 2008 alone, with the last one in Mid-Summer 2020. This one resulted in an additional two billion of asset purchases with Money that didn't exist before, meaning that in 2020/2021 the Fed's money generation accounts for a total of 10% of US GDP. Having this much more money in a system with stable or declining supply (especially in conjunction to the Covid Relief Packages under Trump and Biden) is to me quite likely to have created the very problem the Fed is now trying to solve.
- afterburner 4y agoSeems to me the COVID crash would have been a lot worse without the Fed's intervention. It's always a moving target, because the economy is too complex to nail the perfect intervention, and all interventions are complicated by the reactions of the participants. Under such extreme circumstances (shutting down massive parts of the global economy), there's never going to be the perfect intervention, so there will always be a second order effect to deal with afterwards. In other words, there will always be something to complain about, even if the net effect is positive.