I recently read an article about OPEC, and how oil prices will likely rise for the next year or two. The article said this will cause a significant uptick in inflation indicators, so the Fed will likely raise rates.
I can understand raising rates in response to monetary inflation, but it doesn’t make much sense to me to raise rates in response to supply-side shocks. It also seems cruel since the goal seems to be to raise rates so more people become unemployed or underemployed so that can’t afford to buy gas.
Or, the legislators can do their jobs. Oh wait, the Republicans have a majority in the house. Never mind.
I am old enough to remember when fiscal policy was a tool in managing economic shocks.
Yup. Ideally this would be handled through public policy changes, instead of relying on a quasi-private institution that’s severely limited in its powers.
But apparently that’s too much to ask.