We need to narrow the inflation management mandate. The FOMC seems to believe that raising rates is appropriate for managing inflation caused by supply shocks. With global supply chains and reticent Pax Americana, that is a recipe for exacerbating disaster. For example, if China blockades or invades Taiwan. We would need lower rates to s…
We need to narrow the inflation management mandate. The FOMC seems to believe that raising rates is appropriate for managing inflation caused by supply shocks. With global supply chains and reticent Pax Americana, that is a recipe for exacerbating disaster. For example, if China blockades or invades Taiwan. We would need lower rates to stimulate domestic investments. We've also mixed asset prices, in the form of rent, into inflation. So now a shortage of shelter causes higher interest rates, which reduces the investment which could address the problem.
We need to narrow the inflation management mandate. The FOMC seems to believe that raising rates is appropriate for managing inflation caused by supply shocks. With global supply chains and reticent Pax Americana, that is a recipe for exacerbating disaster. For example, if China blockades or invades Taiwan. We would need lower rates to stimulate domestic investments. We've also mixed asset prices, in the form of rent, into inflation. So now a shortage of shelter causes higher interest rates, which reduces the investment which could address the problem.