4 ms·
The raising interest rates right now makes no sense to me. Energy prices and layoffs will kill spending power. I think the central banks will overcompensate bec
by pipes 6mo ago
The raising interest rates right now makes no sense to me. Energy prices and layoffs will kill spending power. I think the central banks will overcompensate because they got inflation so wrong the last time.
- mswphd 6mo agoinflation has been persistently > 2% (and arguably much more, as the current methodology on how to measure inflation is quite flawed). There's a definite risk of inflation expectations shifting, which central bankers really want to avoid. Your point that there's a recessionary risk is real, but lowering rates might lead to stagflation. Both options are pretty bad honestly.
- altmanaltman 6mo agoCan you elaborate on what you mean by "central banks got inflation so wrong the last time"? You mean Covid or 2008?
- pipes 6mo agoCovid. The ex head of the bank of England said as much.
- altmanaltman 6mo agoI mean the American recovery after a global disaster like Covid was actually pretty good given the situation. What would you propose they should have done instead?