It's easy to say now change policy in the throes of the COVID pandemic. But in reality this move would've created economic shock on top of a supply shock and during a public health crisis. That simply isn't sound and is extremely reactive. And it's hard to say this would've had any impact at all on inflation, which was tied to factors external to fed policy.
The fed should be cautious by making any changes. I believe the fact they didn't rush to judgement has led to a much better than normal situation.
> Inflation began spiking in late 2020 / early 2021.
If by late 2020 / early 2021 you mean April (Q2), then sure. Pretty broad range there when there wasn't spikes in inflation until then.
20/20 in hindsight. A lot of people saying they should've done X or Y. It's easy to say that from behind the desk commenting on HN, all due respect.
> I'm also of the opinion this will spread into the broader economy later this year and the full cost of the Feds mistake has not yet been felt.
I've been hearing this all year from certain political entities. Maybe your blind squirrel will find a nut this year, but so far all the doomsday predictions have continually gotten pushed back. The job market is extremely strong, growth was still strong. If we go into a slight recession, I have to ask, so what?
> The fed should be cautious by making any changes. I believe the fact they didn't rush to judgement has led to a much better than normal situation.
The Fed was not cautious during the pandemic. Not at all! They dropped interest rates to near zero, massively increased QE, and shot the stock market over the moon. Then they sat there watching inflation spiral out of control in the misguided hope that it was "transient" before finally clamping down harder than they would have needed to if they had done the right thing in the first place.
It was a massive overreaction, and a significant change in policy (at least in degree if not in character, especially because the lack of emphasis on inflation policy), and they did it in a hurry before they had a chance to really figure out what was happening. Now we all have to suffer for it -- and the impact of inflation on American families should not be handwaved away or minimized.
Back in 2021, people like Larry Summers were also dismissed for making "doomsday predictions" that turned out to be true. He wasn't the only one who noticed -- but he was the only left-leaning economist brave enough to challenge the new administration by saying what a lot of them already knew. This isn't hindsight -- people knew the Fed was wrong years ago.
The fed should be cautious by making any changes. I believe the fact they didn't rush to judgement has led to a much better than normal situation.
> Inflation began spiking in late 2020 / early 2021.
If by late 2020 / early 2021 you mean April (Q2), then sure. Pretty broad range there when there wasn't spikes in inflation until then.
20/20 in hindsight. A lot of people saying they should've done X or Y. It's easy to say that from behind the desk commenting on HN, all due respect.
> I'm also of the opinion this will spread into the broader economy later this year and the full cost of the Feds mistake has not yet been felt.
I've been hearing this all year from certain political entities. Maybe your blind squirrel will find a nut this year, but so far all the doomsday predictions have continually gotten pushed back. The job market is extremely strong, growth was still strong. If we go into a slight recession, I have to ask, so what?