The Fed is out of credibility.
Its only supporters are flatulent-laden MSM and academic lackeys who could not give a damn less about your trials and struggles to make ends join in this Fed instigated inflation world.
‘Waits and hopes,” quite appropriate terms here for an archaic institution that the people were never asked about or approved. It has two predecessors both gone for good reasons.
Get rid of the Fed, its huge gaggle of economists, its dot-plot nonsense and bring back sound money. The day its demise is announced money will instantly become more sound.
There are few things more paralyzing than committees. The U.S. government is as other governments are also drowning in useless committees. See the EU.
The Fed couldn’t recognize transitory going into this mess what the hell makes you think they can recognize when inflation stops growing?
This is a gigantic clown show at your expense in more ways than ten. This is a huge bureaucratic government scam shoved up the public’s rectum without benefit of KY jelly.
It’s the same old bureaucratic dance and giggles. It’s going to be rough, so you need to suck it up again.
It’s always you. These “trust the experts” impostors have no better fix n the future than you do. In fact, just the opposite.
The Fed is not your friend nor is the trend only as long as things are fixed. Once hell breaks out, you’re on your own.
“The Federal Reserve’s Federal Open Market Committee (FOMC) last week left the target policy interest rate (the federal funds rate) unchanged at 5.5 percent. The target rate has now been flat at 5.5 percent since July of 2023—as the Fed waits and hopes that everything will turn out fine. In his prepared remarks at Wednesday’s FOMC press conference, Powell continued with the soothing message he has generally employed at these press conferences over the past year. The general message has been one of moderate but sustained growth, and an economy marked by “strong” employment trends and moderating inflation.
“Powell then combined this view of the economy with a general narrative on Fed policy in which the FOMC will hold steady until the committee believes that inflation is returning to the “long-run target of two-percent inflation.” Once the Fed is “confident” that the target inflation level has been secured, then the Fed will begin cutting the target interest rate, and this will then send the economy back into another expansion phase.
“Through it all, Powell and the FOMC insist that there will be no significant bumps in the road and a “soft landing” will be achieved. That is, Powell and the Fed repeatedly tell the public that the Fed will thread the needle of pulling down price inflation while also ensuring that the economy continues to grow at solid rates while employment remains strong.
“But there are two problems with this narrative: The first is that the Fed has never actually managed to pull this off—at least not at any time in the last 45 years. In actual experience, this is what happens: the Fed denies there is a recession approaching well until after the recession has begun. Then, the Fed cuts interest rates after unemployment has already begun to march upward.
“The second problem with the narrative is that the Fed is not motivated simply by concerns over the state of employment and the economy. Yes, the Fed would have us believe that it cares only about an unbiased reading of economic data, and that Fed policy is guided by this alone. When the Fed claims to be “data driven” this is what it means. In reality, the Fed is deeply concerned with something else entirely: keeping interest rates low so that the federal government can continue to borrow enormous amounts of money at low yields. The more the federal government adds to its enormous debt, the more pressure there will be on the central bank to keep rates low and send them lower.
“Yes, it’s true the Fed fears price inflation because price inflation causes political instability. When this fear wins out, the fed lets interest rates rise. But, the Federal Treasury also expects the Fed to keep interest rates low for the elites in the federal government who never tire of deficit spending. When the “need” for deficit spending wins out, the Fed forces interest rates down. These two goals are directly opposed to each other. Unfortunately, if the Fed has to choose between the two, it is likely to choose the path of lower interest rates and rising price inflation.
How “Soft Landings” Really Happen
“Let’s first look at the “soft landing” myth. Talk about “soft landings” have been common in the mas media since at least the recession of 2001. As late as July of 2001, for example, Bloomberg authors were speculating about how soft the soft landing would be. It eventually turned out there was no soft landing and the Dot-Com bust soon followed.
“Soft landing” talk was even more prominent in the lead-up to the Great Recession. As late as mid-2008, months after the recession had already begun, fed Fed Chairman Ben Bernanke was predicting a soft landing and that there would be no recession at all. In that recession, the unemployment rate reached 9.9 percent.
“We see this all at work again right now. A look at the Fed’s Summary of Economic Projections (SEP) shows that Fed officials are committed to claiming there will be no recession and economic growth will continue on a slow, steady, and positive trajectory. Yes, the SEP suggests the Fed will soon begin to lower interest rates, but in this fantasy version of the economy, that will be followed by continued economic growth and stable employment.
“That’s not what happens in real life, though. Note, for example, that over the past 30-plus years, that Fed rate cuts did not cap off a “soft landing,” but actually preceded the most vigorous period of job losses. As can be seen in the graph, cuts to the federal funds rate come several months before sizable increases in the unemployment rate. Sharp rate cuts began in 1990, for example, and the 1991 recession soon followed. Similarly, the Fed began to cut rates in late 2000, and then the unemployment rate soon accelerated upward. This again happened in 2007 when unemployment began to mount shortly after Fed rate cuts. More