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Imagine being paid to do a single job - keep inflation under control - and then being so horribly wrong that you conclude a year ago that inflation was transito
by spaceman_2020 4y ago
Imagine being paid to do a single job - keep inflation under control - and then being so horribly wrong that you conclude a year ago that inflation was transitory.
- rowls66 4y agoIf it were a single job, it would be easy, but: The Federal Reserve System has been given a dual mandate—pursuing the economic goals of maximum employment and price stability.
- IggleSniggle 4y agoAnd on the employment front, they’re doing very well! Continued very low unemployment.
- mistertester 4y agoRecession is becoming a reality and that equates to companies laying off their employees. Don't count your eggs before they hatch.
- epistasis 4y agoImagine being given a job, but very very few tools with which to accomplish that job, none of them adequate to the task at hand. And the last ditch tool is to cause a recession. Instead, if we had tools for more localized fixes to supply chains, we would greatly increase our wealth, instead of spending recessionary quarters with people idle and destitute.
- lawn 4y agoIt shouldn't be that surprising, the economy is too complex to be able to accurately predict. It's impossible to succeed at their job.
- throwaway_4ever 4y agoImagine telling someone how bad they are at their job without even realizing their actual job. It’s literally called a “dual” mandate.
- spaceman_2020 4y agoNo part of that dual mandate requires pumping up the markets. Unemployment is at record low. Inflation is at record high. Then why these measly hikes? Inflation has been in an uptrend for 18 months. Unemployment has been robust for nearly a year. Current federal rates? 150bps. The dual mandate has been overtaken by Wall Street addicted to the cheap money punch bowl.
- throwaway_4ever 4y agoThe Fed has stated that it's within their mandate to let inflation run higher since it's been so low the past decade, to have a long term 2%. Their thinking was, while unemployment isn't down to pre-covid levels (it wasn't until March 2022, the date of their first hike), the last decade is actually -4% under a long term 2% average. 2021 coming in at 6% inflation would be a 2% inflation average the past decade, but it still only came in at 4.7%. Inflation at 3.3% this year would still be exactly a 2% average, and we're currently overshooting that, thus the frantic 75 bps hikes. But with July's numbers already looking greatly down, the rest of the year could still prove like a 2.2% yearly inflation over the past decade. Feel free to look at how low inflation has been: https://www.usinflationcalculator.com/inflation/current-inflation-rates/ https://www.usinflationcalculator.com/inflation/current-infl...
- slaw 4y ago75 bps hikes are not frantic. Hikes should be 300 bps to be barely enough.
- throwaway_4ever 4y ago75 bps hikes are unprecedented in the last 40 years, since Volcker, and they are happening every month right now. By historical measures, I'd consider it frantic compared to most of history being long periods of unchanging rates. Look at the gradient of the recent hikes: https://www.macrotrends.net/2015/fed-funds-rate-historical-chart https://www.macrotrends.net/2015/fed-funds-rate-historical-c...