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> Meanwhile, the Fed fecklessly raises interest rates over and over, refusing to acknowledge that it didn't work The interest rate hikes did work. The inflatio
by Aunche 3y ago
> Meanwhile, the Fed fecklessly raises interest rates over and over, refusing to acknowledge that it didn't work
The interest rate hikes did work. The inflation rate has dropped by over 5% from it's peak [1]. Real wages rebounded right after the Fed started raising interest rates [2].
[1] https://fred.stlouisfed.org/graph/?g=rocU https://fred.stlouisfed.org/graph/?g=rocU
[2] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- NoPedantsThanks 3y agoHAS dropped, way later. Not to mention that this is correlation, not necessarily causation.
- Aunche 3y agoIt wasn't much later. The Fed started raising interest rates in March of 2022, and inflation peaked 3 months after that. The ability of firms to "price gouge" is evidence of monetary inflation, so I'm not sure why you'd be so opposed to interest rate hikes.
- NoPedantsThanks 3y ago"The ability of firms to "price gouge" is evidence of monetary inflation" Where do you get that? It's far more likely evidence of monopoly/oligopoly power.
- Aunche 3y agoMonopoly power isn't mutually exclusive with monetary inflation. The competitive landscape didn't significantly change in 2021 when inflation started to rise. That firms were able to increase their profits significantly during this period indicates an increase in aggregate demand, which suggests monetary inflation. Even if monopoly power was a factor, it wouldn't be able to be realized without the increase in demand.