Do we need a runaway inflation before someone like Volcker steps in?
- Thread starter schizo
- Start date
This. And there is nothing the Fed can do at this point. They can raise interest rates to a billion percent, the government will keep spending far, far more than it takes in, with the Fed buying the excess, leading to inflation.
Explain why that would be bad, pertaining to interest rates.
Volcker saved the American economy.
Are you an idiot? Jay Powell raised rates in 2018 as the economy was softening and had to cut rates in 2019 after giving a mea culpa. He doesn’t want to do that again — US (and global) economic data has pointed to softening and he’s not going to raise rates while that’s happening. If you look at the dot plot you’ll get a good understanding of when the Fed expects economic data to normalize and when they plan to lift off.
What is the point of telling someone they are an idiot? I read your complete answer. You have very little knowledge on how the actions of the Fed affect economy, but who cares.
If you lived through that period, you won't need any explanation. The cliff's note version is the inflation ramped up to nearly 20% by the time Volcker stepped in with his hatchet and slashed and slashed and slashed. That, in turn, created a big recession in the early 80s, which at the time seemed more painful than the Great Recession of 2008. Anyway, those idiots before Volcker were all asleep at the wheel much like Monsieurs Jerome Powell and his ilk are presently doing.
Had there not been 20% inflation, we wouldn't have seen Volcker in the first place, now would we?