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> * Injecting real cash into the economy (stimulus checks and PPP loans to small businesses) That's kind of hard to believe when inflation went up worldwide.
by StrangeATractor 4y ago
> * Injecting real cash into the economy (stimulus checks and PPP loans to small businesses)
That's kind of hard to believe when inflation went up worldwide.
- fosk 4y agoThe US is the largest market for almost any vendor, so more demand in the US will drive lack of supply elsewhere. That plus...the supply chain bottlenecks were real, and affect the whole world. Supply chain was the focus of the Fed until late 2021 when they realized they couldn't wait for the supply chain to fix itself anymore, and they started to lower demand by increasing the interest rates. The ECB followed the course. The fact that we focused so much on lowering US demand in 2022-2023 by increasing interest rates, should not distract us from the fact that supply chain bottlenecks are the real issue we are trying to fix (by lowering demand, most of which spiked up because of fiscal policy after Covid), which is a global problem. Jerome Powell was not wrong in saying that inflation was transitory, he was just too optimistic on the time it would take to heal the supply chain.