This is really important, read and share this. [Gifted article, The Washington Post] This should be a 5-alarm fire for anyone who cares about inflation
With the 2024 election approaching, the central bank’s independence is on the line. By Catherine Rampell
“Even if evidence indicated #theFed capable of such precision (evidence does not), Joseph C. Sternberg’s question in the WSJ is apposite: ‘Who elected these folks to aim for a 50% loss in purchasing power of a #dollar every 35yrs?’
“In a recent rpt, the Manhattan Inst’s Dan Katz & Stephen Miran argue that ‘the Fed’s current governance has facilitated #groupthink that has led to significant #monetary#policy errors
“‘while allowing #theFed the flexibility to unwisely expand its remit into inherently #political areas such as #credit rationing & #banking#regulation.’ Here is #groupthink: ‘Despite the biggest #monetary errors in 4 decades,’ Katz & Miran write, none of the 9 recent appointees to the Board of Governors was on record as having made accurate predictions about #inflation’s path.
“#MissionCreep: #TheFed has moved beyond its traditional technocratic role & ‘pursued a much more expansive #monetary & #regulatory agenda that is more consistent w/an explicitly #political institution.’”
Prices cooled further in Jan, offering the latest sign that inflation has eased significantly since its pandemic-era surge but still hovers above what policymakers consider normal. Data from the Bureau of #Labor Statistics on Tues morning showed prices rose 3.1% in Jan, compared w/the year before. They also rose 0.3% compared w/the previous month.
The report comes as the #FederalReserve presses on in its fight to tame high prices — but the central bank already has plenty of success in the rearview mirror. After sprinting to hoist interest rates in 2022 & 2023, ofcls are entering a new phase: cutting borrowing costs multiple times this year. The message is that even though inflation hasn’t settled all the way down, the economy is stable enough for #theFed to take its foot off the brake. #inflation#economy#Bidenomics#VoteBlue
This morning’s #news headlines are utterly irrational. While the European economy is still suffering, the U.S. economy is doing incredibly well because of Biden’s economic policies. Yet #Trump now leads #Biden by 6 points. Complete #CognitiveDissonance!