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Visitor

Member Since: Sun Jul 30, 2017
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In Reply To
Late Great Donald Blake 
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Member Since: Sat May 17, 2008
Posts: 7,517
Subj: Re: But suffice to say it's your estimation that there's nothing Biden can do?
Posted: Tue Jun 21, 2022 at 05:23:50 pm EDT (Viewed 181 times)
Reply Subj: Re: But suffice to say it's your estimation that there's nothing Biden can do?
Posted: Tue Jun 21, 2022 at 02:52:46 pm EDT (Viewed 179 times)



    Quote:
    I'm curious... who will be most affected by a FED instituted recession made to reduce inflation. From what I understand the economic orthodoxy you're referring to suggests that because demand is outstripping supply, inflation is increasing and so the only way to cool down the economy is to  cause a recession which among other things reduces wages and decreases thereby demand. So to stop working people from paying more for goods, we'll reduce the amount they have to spend. That's the basic idea, right?


The short answer: The FED's goal is to slow the economy down by gradually increasing interest rates to reduce demand by making it more expensive to borrow money without triggering a recession. Keep in mind, while inflation is a problem, job employment outlook is good around 3.6% which means people are getting back to work which will hopefully ease the pressure on supply chains.