Gunny
01-31-2022, 09:44 AM
Cure for inflation: The Fed raises rates and we get a recession. While it matters not one bit to me how bad Biden can sink himself on every avenue he's ventured, seems recession is where we left off with Obama.
Also of interest (to me) is that 2+ years later and they STILL haven't got the logistics (shipping/supply) straightened out. Military logistics are faster than this.
President Joe Biden delivered massive stimulus to the economy that sparked historic job growth but also contributed to the highest inflation rates in four decades. Now, he’s counting on the Federal Reserve to come to the rescue.
The economy grew at a blistering 5.5 percent rate in 2021, wage gains have far outstripped their pace from before the pandemic, and unemployment has plunged to 3.9 percent. But price spikes are eating up people’s paychecks and feeding anxiety about the future. As a result, Biden is getting little credit for the economic boom.
Worse for the White House, it has few immediate options for taming inflation as it waits for production and shipping logistics to untangle. Instead, Biden will mostly have to hope that the Fed can bring prices to heel through interest rate hikes without derailing the recovery.
“The only two levers to bring down inflation are patience and the Fed,” said Jason Furman, a Harvard professor who served as top economist under President Barack Obama and is close to the Biden White House.
Fed Chair Jerome Powell has accepted the task, saying on Wednesday that there’s “quite a bit of room” for the central bank to raise interest rates. But even that isn’t without risk: The Fed has a history of causing recessions when it raises borrowing costs to bring down inflation, and the stock market has already been experiencing dizzying swings as investors parse what higher interest payments might mean across the corporate landscape.
continued @ https://www.politico.com/news/2022/01/31/biden-inflation-powell-federal-reserve-00003246
Also of interest (to me) is that 2+ years later and they STILL haven't got the logistics (shipping/supply) straightened out. Military logistics are faster than this.
President Joe Biden delivered massive stimulus to the economy that sparked historic job growth but also contributed to the highest inflation rates in four decades. Now, he’s counting on the Federal Reserve to come to the rescue.
The economy grew at a blistering 5.5 percent rate in 2021, wage gains have far outstripped their pace from before the pandemic, and unemployment has plunged to 3.9 percent. But price spikes are eating up people’s paychecks and feeding anxiety about the future. As a result, Biden is getting little credit for the economic boom.
Worse for the White House, it has few immediate options for taming inflation as it waits for production and shipping logistics to untangle. Instead, Biden will mostly have to hope that the Fed can bring prices to heel through interest rate hikes without derailing the recovery.
“The only two levers to bring down inflation are patience and the Fed,” said Jason Furman, a Harvard professor who served as top economist under President Barack Obama and is close to the Biden White House.
Fed Chair Jerome Powell has accepted the task, saying on Wednesday that there’s “quite a bit of room” for the central bank to raise interest rates. But even that isn’t without risk: The Fed has a history of causing recessions when it raises borrowing costs to bring down inflation, and the stock market has already been experiencing dizzying swings as investors parse what higher interest payments might mean across the corporate landscape.
continued @ https://www.politico.com/news/2022/01/31/biden-inflation-powell-federal-reserve-00003246