One more

 

Jackson Hole Latest: Shrinking Fed Balance Sheet an Uphill Task

"The Federal Reserve won’t be able to curb inflationary pressures because they are rooted in expansionary fiscal policy, according to a paper presented at the central bank’s annual Jackson Hole conference on Saturday."

“The fact that approximately half of the recent increase in inflation has fiscal roots poses some specific challenges for policy makers today. Not only fiscal inflation tends to be highly persistent but it also requires a different policy response,” the paper’s authors, Francesco Bianchi of Johns Hopkins University and Leonardo Melosi of the Chicago Fed, wrote."

(Expansioary fiscal policy =

"Quantitative easing, or QE, refers to the massive bond-buying campaigns launched by the Fed during the 2008 financial crisis and unleashed again as the pandemic spread in 2020. quoting from the article)

The paper, whose co-authors include Raghuram Rajan of the University of Chicago, was a word of warning for US policy makers, who have begun shrinking the balance sheet even as they raise interest rates."

(It wasn't just $ printing, it was massive bond buying campaigns nobody ever talks about. Half of the increase in inflation is rooted in expansioary fiscal policy and a third of it is rooted in supply shocks. That gives the Fed .2% to be able to deal with through interest rate hikes. "The fed simply doesnt have the tools to deal with this,it hits supply and consumer sides both at the same time." I believe somebody said the day before lockdown hit KY. Yup...

"fiscal inflation tends to be highly persistent"...might wanna file that away for future reference. 

And "but it also requires a different policy response", I'm all ears. Like what exactly?)

"IMF Deputy Sees Period of Hot US Inflation (4:49 p.m.)

The US is likely to experience higher inflation for some time, and the top economic job is to ease price growth and not cut rates too soon, the International Monetary Fund’s deputy chief said.

“We are in a period where inflation is likely to be high for a while, at least for another year or two,” IMF First Deputy Managing Director Gita Gopinath said in an interview on Bloomberg Television.

(It's about to be the least of your concerns here soon.

(Inflation)

Visit the post about the Ukrainian air force not worried about Russia build up on its borders)

"Cleveland Federal Reserve President Loretta Mester said the US central bank was “all in” against inflation and she favors raising interest rates above 4% early next year and hold there to curb price pressures.

“I think we’re going to have to move them up -- and this is based on my current read of the data -- above 4% and probably need to hold them there next year,” Mester said in an interview with Bloomberg Television. “So in other words, move them up to slightly above 4% some time early next year, and then just keep them there in order to get this inflation under control.”

(Well I think we all know what happens at about 4.25- 4.5%, so how much farther above 4% is she talking exactly? And again why is that such an important number when interest rates being half the inflation rate have never solved inflation in the past and not now when half of inflation is due to expansive policy and a third is due to supply shocks. We back ourselves into a corner with the financial crisis and Russia and China both know it. 

Your only hope for escape is Christ Lord god almighty.

Period.

Id wrap my head around it if I was you)