What is the Fed Doing? - A Wealth of Common Sense

If anything, it feels like the Fed wants to fight us, all of us, including the stock market and the economy.

The Fed is actively trying to crash the stock market, break the housing market and push the economy into a recession.

In fact, this week Fed chair Jerome Powell basically said people need to lose their job to slow inflation:.

We’re never going to say that are too many people working, but the real point is this, inflation, what we hear from people when we meet with them is that they really are suffering from inflation.

And if we want to set ourselves up really light the way to another period of a very strong labor market, we have got to get inflation behind us?

I mean it really depends on how long it takes for wages and more than that, prices, to come down for inflation to come down.

And I think once you’re on that path, that’s a good thing, and things will start to feel better to people, they’ll feel lower inflation, they’ll feel the economy is improving, and also, if our projections are close to right, you’ll see that the costs in unemployment are, they’re meaningful, and they’re certainly very meaningful to the people who lose their jobs, and we talk about that in our meetings quite a lot.

People REALLY don’t like sky-high inflation.

They don’t dictate how the different waves of Covid will impact the global economy.

I appreciate how the Fed must feel somewhat responsible for the highest inflation reading in 40 some odd years because they kept rates at 0% for a long time and gobbled up bonds like people at Costco eating free samples.

They want the stock market to go down.

They want people to lose their jobs and make less money.

Obviously, the Fed did not assume we would see inflation rise to 9% this year (neither did I).

It feels like we’ve been through 7 economic cycles in the past 3 years?

The stock market is crashing.

Why don’t we let the economy breath for a hot minute before trying to get people fired from their job?

I’m not worried about the stock market or the bond market?

We really want to put people through that again so soon.

Why not allow people to see their wages rise for a little longer and have a little patience to see if the pandemic-related inflation stuff will subside on its own.