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I am not disagreeing the supply side squeeze but this has been happening since 2020. If you look at container flow stat it is clear as early as 2021 we had seve

I am not disagreeing the supply side squeeze but this has been happening since 2020. If you look at container flow stat it is clear as early as 2021 we had severe clogging issues. The problem was the narrative back then from Fed was that this is all transitory. They didn’t act.

SkyMarshal 4y ago
If the problem was a supply side squeeze, the Fed has no mandate or tools for that. They couldn’t act. That’s on the govt and private sector to solve.
- mercy_dude 4y ago
  That’s not true. You can reduce household demands by raising the rates which is what they are trying to do now. But the challenge is now the inflation has outpaced them and Fed has missed the mark by quite a bit. Heck they are now taking about raising rate by 100 basis point. A year ago this was unthinkable when meme stocks were on the fly. But you can’t raise the rates fast and not cause spiral in for example liquidity or repo market. Point is Fed has done a lot of damage. In a functioning democracy, Fed chair would be summoned by congress and Fed would be held responsible for not keeping its dual mandate - price stability (which inflation is causing wreckage) and unemployment ( from an impending recession). If a Fed agency can’t keep its mandate, it’s time to look at its validity. But of course our elected leaders won’t. They love nothing but delegating to unelected agencies full of so called experts so they don’t have to make hard choices/decisions and bear the consequences from voters. So they just shield themselves with experts.
  - SkyMarshal 4y ago
    > That’s not true. You can reduce household demands by raising the rates which is what they are trying to do now. That changes demand, not supply, as you astutely observe. Fed has no tools for supply, by design. That's why they've pushing back on the US govt recently, talking publicly about how current inflation is 30% due to demand (oversupply of money, low interest rates) and 50% due to supply constraints (food, energy, and Asian supply chain slowdowns). They're telling the US govt that solving inflation will require govt and private sector solutions to the supply problems. The Fed has no tools for those.

SkyMarshal 4y ago

If the problem was a supply side squeeze, the Fed has no mandate or tools for that. They couldn’t act. That’s on the govt and private sector to solve.

mercy_dude 4y ago
That’s not true. You can reduce household demands by raising the rates which is what they are trying to do now. But the challenge is now the inflation has outpaced them and Fed has missed the mark by quite a bit. Heck they are now taking about raising rate by 100 basis point. A year ago this was unthinkable when meme stocks were on the fly. But you can’t raise the rates fast and not cause spiral in for example liquidity or repo market. Point is Fed has done a lot of damage. In a functioning democracy, Fed chair would be summoned by congress and Fed would be held responsible for not keeping its dual mandate - price stability (which inflation is causing wreckage) and unemployment ( from an impending recession). If a Fed agency can’t keep its mandate, it’s time to look at its validity. But of course our elected leaders won’t. They love nothing but delegating to unelected agencies full of so called experts so they don’t have to make hard choices/decisions and bear the consequences from voters. So they just shield themselves with experts.
- SkyMarshal 4y ago
  > That’s not true. You can reduce household demands by raising the rates which is what they are trying to do now. That changes demand, not supply, as you astutely observe. Fed has no tools for supply, by design. That's why they've pushing back on the US govt recently, talking publicly about how current inflation is 30% due to demand (oversupply of money, low interest rates) and 50% due to supply constraints (food, energy, and Asian supply chain slowdowns). They're telling the US govt that solving inflation will require govt and private sector solutions to the supply problems. The Fed has no tools for those.