Because interest rates can never get to that level, it's the economy stupid!.
High interest rates to 8% come on be real!!
Not with the economy in such a vulnerable state.
Whatever Powell says, and his predecessors have said, it has amounted to empty threats .
Despite them, the Fed has done pretty much nothing since the GFC in 2008 to raise interest rates.
He struts and frets his moment on the stage, full of sound and fury signifying nothing.*
High interest rates are not necessarily key original drivers of inflation.
Rather, they're an attempt to control it.
High rates dampen down demand. They are what's used when inflation is caused by excess demand.
This is not the situation here which is not largely demand-driven inflation.
It's supply shortages and too much money in circulation without enough demand and asset bubbles.
If you cannot raise rates because of the resulting collapse in business and consumer confidence, then you're pretty much snookered.
Which is why Powell is reduced to making homilies and statements of the bleeding obvious. Like a well dressed but convincing idiot.
What do the policy makers do? What have they done so far?
Issue more money via QE and manipulate gold and silver and try to talk down crypto, or try to develop crypto themselves.
Because you cannot face these realities, you're in a constant state of denial.
The Fed marches on playing the pipe, like the Pied Piper of Hamlin.
Ordinary people get hurt by inflation? You don't say!!!!
*The full quote:
— To-morrow, and to-morrow, and to-morrow,
Creeps in this petty pace from day to day,
To the last syllable of recorded time;
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury
Signifying nothing.— Macbeth (Act 5, Scene 5, lines 17–28)
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