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This wasn't "one of the most aggressive episodes". This was nothing compared to Volcker in 1979-1981. And the fact that nothing has broken indicates that they
by AnimalMuppet 3y ago
This wasn't "one of the most aggressive episodes". This was nothing compared to Volcker in 1979-1981.
And the fact that nothing has broken indicates that they didn't go overly aggressive. They stopped inflation from getting worse without driving the country into a recession. That's a pretty decent balancing act.
- alephnerd 3y agoPedantry and HN. Name a better combo. But yea I agree with ya on the 2nd half.
- deleted 3y ago[deleted]
- smallmancontrov 3y agoThe economy that Volcker hiked into wasn't nearly as leveraged (because the debt had been inflated away / soft defaulted upon). A small rate increase on a lot of debt vacuums up as much money as a large increase on a small amount of debt. However, the duration on most household/corporate debt at the moment is such that it hasn't felt the sting of rate increases yet. As usual, it's complicated.
- Temporary_31337 3y agoToo early to tell IMO. The fact that inflation is going up again tells me they may have played too safe with the only blunt instrument that they have