{"id":61169,"date":"2021-12-29T08:09:29","date_gmt":"2021-12-29T13:09:29","guid":{"rendered":"https:\/\/olduvai.ca\/?p=61169"},"modified":"2021-12-29T08:09:29","modified_gmt":"2021-12-29T13:09:29","slug":"the-economy-may-be-finally-peaking-and-the-fed-wont-help-matters","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=61169","title":{"rendered":"The Economy May Be Finally Peaking, and the Fed Won’t Help Matters"},"content":{"rendered":"
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THE ECONOMY MAY BE FINALLY PEAKING, AND THE FED WON\u2019T HELP MATTERS<\/a><\/h3>\n<\/div>\n<\/header>\n
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Here we go again it may seem to many. The Fed is preparing us for a policy tightening just when a powerful growth cycle upturn is faltering. Or is it in fact an example of another well-known type of error from Fed history\u2014getting behind the curve of rising inflation? The most plausible answer is that it is neither.<\/p>\n

Instead, the huge monetary inflation shock which the Fed has administered so far in this pandemic means that the \u201cnormalization steps\u201d now in prospect for 2022 are all but irrelevant to macroeconomic prospects or asset market price trajectories.<\/p>\n

The more Federal Reserve\u00a0chief Jerome Powell has been huffing and puffing, since his renomination (November 22), about normalizing policy, the steeper has been the fall in long-term interest rates. In the first two trading weeks following the renomination, the ten-year yield on US Treasurys was down by thirty basis points to 1.35 percent. A coincidence, surely, explained in part by the possible Omicron menace? Yes, perhaps in part, but not altogether.<\/p>\n

The chief\u2019s performance is now in the theater\u00a0of the absurd. Many in the marketplace have deserted the audience, though the noise still irritates them. Instead, they focus on the drama of monetary reality. The title? \u201cLost Illusions on the Journey from Mega Pandemic Inflation to Great Depression.\u201d\u00a0The evolving mood of the audience here will have a powerful effect on financial markets and ultimately the global economy.<\/p>\n

Toward\u00a0understanding the theater of the absurd and its triviality, recall the story of the natural history museum renowned for its dinosaur relics. The guardian there, quizzed by a child as to the age of those specimens, answers: 5 million years and 90 days. How so? Because when he started work there, around three months ago, he was told their age was 5 million years!<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE ECONOMY MAY BE FINALLY PEAKING, AND THE FED WON\u2019T HELP MATTERS Here we go again it may seem to many. The Fed is preparing us for a policy tightening just when a powerful growth cycle upturn is faltering. Or is it in fact an example of another well-known type of error from Fed history\u2014getting […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,426,1304,534,538,13351,3650],"class_list":["post-61169","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-inflation","tag-monetary-inflation","tag-monetary-policy","tag-money-printing","tag-price-inflation","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61169","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=61169"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61169\/revisions"}],"predecessor-version":[{"id":61170,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61169\/revisions\/61170"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=61169"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=61169"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=61169"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}