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The Fed has a dual mandate of controlling inflation AND minimizing the unemployment rate. You have to try to influence business growth to accomplish the second

The Fed has a dual mandate of controlling inflation AND minimizing the unemployment rate. You have to try to influence business growth to accomplish the second goal and it makes perfect sense.

scotty79 3y ago
Yes. And that's dumb. And the only way US could get away with it for so long was because it printed money for the global economy. So the whole world cushioned their meddling. In recent years their messed up so badly that even global economy sqealed as it could no longer bear the burden. Any other country or even EU, doing the same thing as FED does, would be in deep trouble in less than a decade.
- Wytwwww 3y ago
  > Any other country or even EU, Wasn't the scale of QE as proportion of GDP significantly larger in the Eurozone in the 2010s? Even now the total value of assets held by the ECB is only a bit lower than the Fed ($7.44 trillion vs 7.9). The situation before the pandemic was similar, the ECB even had more assets than the Fed throughout 2019.
  - scotty79 3y ago
    Doesn't matter. Global economy runs on dollar not euro. If they do exactly the same what US does they'll get hit by inflation even harder. If you want to compare impacts of printing you shouldn't compare it with GDP or central bank assets but with total amount of given currency already in circulation globally.
    - Wytwwww 3y ago
      > If they do exactly the same what US does they'll get hit by inflation even harder. My entire point is that the monetary policy in the Eurozone has been considerably looser between 2014 and 2020 and comparable after that. > If you want to compare impacts of printing you shouldn't compare it with GDP or central bank assets but with total amount of given currency already in circulation globally. So the ECB "printed" considerable more if measured that way, prior to 2020 at least and they were relatively "fine" inflation wise.
      - scotty79 3y ago
        If inflation is low and controlled it means the supply of money matches the demand for money which is usually associated with value creation in the economy. The fact that EU was doing well inflationwise despite having looser monetary policy than US means that Eurozone economy was doing better in that period than US and global economy. Of course in relative terms.
throw0101c 3y ago
Not wrong, but does the ECB have a dual mandate? (At least legally / officially?) * https://www.ecb.europa.eu/mopo/intro/html/index.en.html https://www.ecb.europa.eu/mopo/intro/html/index.en.html
cjfd 3y ago
It would appear to be a bit hard to target two outputs when you have one input....
Supermancho 3y ago
> The Fed has a dual mandate of controlling inflation AND minimizing the unemployment rate. Re: https://www.federalreserve.gov/monetarypolicy/monetary-policy-what-are-its-goals-how-does-it-work.htm https://www.federalreserve.gov/monetarypolicy/monetary-polic... I'm very sure The Fed does not have a mandate to minimize the unemployment rate, despite the stated policy. The shifting definition of "employment" being one of the primary tools, alongside the old standbys of "blaming something else" and "give it time". There's almost no historical accountability, so there's no reason to think this will change.
- keep_reading 3y ago
  It's not the Fed's responsibility to control what the definition of "employment" is. If you want changes at the Fed vote for a new generation of Congress who will legislate a new mandate.
  - Supermancho 3y ago
    The Fed chair explains the context under which the numbers look best and the whitehouse gets that data out of the omb. Saying congress controls it is more of the same "blame someone else", when the reports are crafted carefully to make the fed look like they are a tool rather than the face of the real power brokers (investment firms). Famously, Clinton complained about this.

The Fed has a dual mandate of controlling inflation AND minimizing the unemployment rate. You have to try to influence business growth to accomplish the second goal and it makes perfect sense.

scotty79 3y ago

Yes. And that's dumb. And the only way US could get away with it for so long was because it printed money for the global economy. So the whole world cushioned their meddling. In recent years their messed up so badly that even global economy sqealed as it could no longer bear the burden. Any other country or even EU, doing the same thing as FED does, would be in deep trouble in less than a decade.

Wytwwww 3y ago
> Any other country or even EU, Wasn't the scale of QE as proportion of GDP significantly larger in the Eurozone in the 2010s? Even now the total value of assets held by the ECB is only a bit lower than the Fed ($7.44 trillion vs 7.9). The situation before the pandemic was similar, the ECB even had more assets than the Fed throughout 2019.
- scotty79 3y ago
  Doesn't matter. Global economy runs on dollar not euro. If they do exactly the same what US does they'll get hit by inflation even harder. If you want to compare impacts of printing you shouldn't compare it with GDP or central bank assets but with total amount of given currency already in circulation globally.
  - Wytwwww 3y ago
    > If they do exactly the same what US does they'll get hit by inflation even harder. My entire point is that the monetary policy in the Eurozone has been considerably looser between 2014 and 2020 and comparable after that. > If you want to compare impacts of printing you shouldn't compare it with GDP or central bank assets but with total amount of given currency already in circulation globally. So the ECB "printed" considerable more if measured that way, prior to 2020 at least and they were relatively "fine" inflation wise.
    - scotty79 3y ago
      If inflation is low and controlled it means the supply of money matches the demand for money which is usually associated with value creation in the economy. The fact that EU was doing well inflationwise despite having looser monetary policy than US means that Eurozone economy was doing better in that period than US and global economy. Of course in relative terms.

throw0101c 3y ago

Not wrong, but does the ECB have a dual mandate? (At least legally / officially?) * https://www.ecb.europa.eu/mopo/intro/html/index.en.html https://www.ecb.europa.eu/mopo/intro/html/index.en.html

cjfd 3y ago

It would appear to be a bit hard to target two outputs when you have one input....

Supermancho 3y ago

> The Fed has a dual mandate of controlling inflation AND minimizing the unemployment rate. Re: https://www.federalreserve.gov/monetarypolicy/monetary-policy-what-are-its-goals-how-does-it-work.htm https://www.federalreserve.gov/monetarypolicy/monetary-polic... I'm very sure The Fed does not have a mandate to minimize the unemployment rate, despite the stated policy. The shifting definition of "employment" being one of the primary tools, alongside the old standbys of "blaming something else" and "give it time". There's almost no historical accountability, so there's no reason to think this will change.

keep_reading 3y ago
It's not the Fed's responsibility to control what the definition of "employment" is. If you want changes at the Fed vote for a new generation of Congress who will legislate a new mandate.
- Supermancho 3y ago
  The Fed chair explains the context under which the numbers look best and the whitehouse gets that data out of the omb. Saying congress controls it is more of the same "blame someone else", when the reports are crafted carefully to make the fed look like they are a tool rather than the face of the real power brokers (investment firms). Famously, Clinton complained about this.