The Fed’s rates increases are predicated on the belief that they will “tame inflation.” But Fed representatives recognize it’s a blunt instrument, which in particular won’t address supply side issues, which are impacting, e.g., the price of gas and food. A major decision to raise rates so quickly is (certainly?) based on research and deliberation. I’d imagine that the Fed concluded that, while the instrument is blunt, it’s better than any alternatives. Could someone help explain the extent to which the Fed actually has the power to tame this current bout of inflation—whether their efforts have a ceiling, if you will—and what alternatives it might have considered, but discarded?
Story Published at: March 22, 2023 at 02:51PM
Story Published at: March 22, 2023 at 02:51PM