Inflation

How Did the Fed Not Anticipate the Inflation Surge?

We were told it would be "transitory." But inflation continued to rise.

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As the greatest inflation spike of the last 50 years occurs, the utter failure of economists, their models, and many pundits to foresee what was coming is worth highlighting. Of course, the biggest malfunction in the story was that of the Federal Reserve itself, which had a clear mandate to keep prices stable and seems surprised by their lack of stability.

It's no understatement to say that the Fed failed to properly anticipate the inflation surge. On Feb. 8, 2021, Raphael Bostic, the president of the Atlanta branch of the Fed, said, "I'm really not expecting us to see a spike in inflation that is very robust in the next 12 months or so." A few days later, Boston Fed President Eric Rosengren echoed this sentiment, noting that he would be "surprised" to see broad-based inflation sustained at a level of two percent before the end of 2022.

As the saying goes, problems often start at the top. When testifying before the House Financial Services Committee in February 2021, Fed Chair Jerome Powell predicted that it might take more than three years to hit the two percent inflation goal.

Around the summer of 2021, inflation became hard to ignore. Yet Fed officials insisted that it wasn't yet time to roll back their temporary policies because they weren't responsible for the rise in prices. The main villain was identified as supply-chain restraints. Once resolved, we were told, inflation would prove to be transitory. Testifying in June of last year before a House subcommittee, Powell said:

"If you look…at the categories where these prices are really going up, you'll see that it tends to be areas that are directly affected by the reopening. That's something that we'll go through over a period…then be over. And it should not leave much of a mark on the ongoing inflation process."

During a speech in Jackson Hole, Wyoming, last August, Powell again echoed this sentiment. He also noted that "longer-term inflation expectations have moved much less than actual inflation or near-term expectations, suggesting that households, businesses, and market participants also believe that current high inflation readings are likely to prove transitory."

But as Hoover Institution economist John Cochrane has been reminding us all along, long-term inflation expectations are notoriously poor predictors of inflation. Sadly, few listened, and team "transitory" was born.

I thought this was a useless label since inflation was always going to be transitory. Even the inflation of the 1970s ended in the '80s. What mattered is whether transitory inflation meant a few weeks, months, or years. Inflation continued to rise, and the meaning of transitory continued to shift so much so that Powell officially retired the word on November 30. By then, inflation had reached a staggering 6.8 percent.

Many non-Fed officials made their own bad predictions based on sophisticated forecasting models and/or expectations—the same expectations Cochrane urged us not to be too complacent about. Theories for why we shouldn't worry abounded. It was caused by a base-effect price increase, supply-chain restraints, a drought in Taiwan—everything but the Fed's expansionary policies and Congress' overspending, in part because some of these experts had cheered for these actions all along.

Undeterred, some of the same people continue to make predictions that inflation will decline during the second half of 2022. Perhaps. I don't make predictions. However, I know that the amount of money printed, borrowed, and spent during the last few years led to a one-time price level rise, and we may have a way to go until we are done. Yes, inflationary pressures like government cash and supply constraints will ease, but that may not be enough without vigorous monetary and fiscal restraints. And until now, the Fed has been dragging its feet to act.

A few economists did get it right. One is former Treasury Secretary Larry Summers, who warned a year ago that President Joe Biden's American Rescue Plan could "set off inflationary pressures of a kind we have not seen in a generation." A day later, former International Monetary Fund Chief Economist Olivier Blanchard tweeted: "I agree with Summers. The 1.9 trillion program could overheat the economy so badly as to be counterproductive."

There were others, too. They were mocked and the legislation passed.

Everyone makes mistakes. The important lesson here is that we should all be humbler. Maybe it's time to think more and model less.

COPYRIGHT 2022 CREATORS.COM.

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  1. Audit the Fed!

    1. What good would that do? Seriously, what do you think an audit would change? What do you think they would find? The assets they claim they have are there. They have never once, ever, claimed to have 100% reserves available for M2. So what exactly do you think an audit would find?

      The problem with the Fed is NOT that they are cheating the books. The problem with the Fed is that it's a CENTRAL BANK. No amount of auditing will change that.

      1. All an audit would find is that the Fed pays itself and its employees obscene amounts of money by government employee standards.

        1. But they are not government employees.

          1. Technically they are not, but they like to pretend they are.

          2. They are required by law to transfer all profits to the government, and they therefore have a perverse incentive to maximize their costs. They probably are paying themselves very generously, and in so doing they are cheating the taxpayer. I wouldn't expect a modern day Reason libertarian to understand.

      2. It sics the IRS on people who deserve it and reduces their ability to inflict pain on hardworking American?

        Also in the words of Nelson Muntz, Gotta audit something.

    2. Reason-libertarians oppose any interference or questioning of the wisdom of our economic central planners. The Federal Reserve is sacrosanct. Do you want more racist newsletters?

  2. Because the fed is caught between its own idiocy and bidens money printer.

    After the cdc, FDA, and Biden admin have lied about nearly everything for 2 straight years, why would you expect the fed to be different?

  3. The government made it illegal for a large section of the population to go to work in the name of stopped the dreaded COVID but then tried to make up for it by printing money and sending said people checks to make up for their lost wages. And I am supposed to believe that the Fed didn't understand that such a combination of policies wouldn't result in inflation?

    I understand that nearly everyone in a position of authority in this country is profoundly stupid and anyone called an "expert" doubly so. No one, however, is that stupid. They absolutely knew this would cause inflation and inflation was the plan all along.

    1. That's my problem too. The Fed is full of economists who are far more well-versed in monetary economics that I am. But that they seemed to want to compartmentalize the fiscal and monetary stimulus in terms of inflation is beyond stupidity. The minute the Treasury's printing presses went non-stop, they should have started slowly raising interest rates. Instead they doubled down and we're left with this mess now.

      1. They have been printing money since about 09. What broke the system was the government response to the pandemic destroying the supply chain. So, you had all of this money floating around out there and an economy that was legally prohibited from producing goods and services. All of the leftist idiots who asked "why can't we have lockdowns forever and just pay the people who can't work" apparently were fed economists.

        1. This.

          They printed tons of money and made it illegal to actually produce any corresponding wealth. Inflation is the only possible outcome and it doesn't take a trained economist to figure that out.

        2. The feds starting printing all that money in 09 in order to boost Obama. Free money for everyone that doesn't work or produce anything!

          Then the governments' disastrous response to Covid pretty much broke everything. No one was working, no one was producing, but so many people were getting money. The zoom crowd were at home working from their computer, getting their usual paycheck, and still getting money from the government. People who had never worked but instead lived on the taxpayers dime, got even more money. How stupid was that?!!

          A country can go bankrupt slowly and then all at once.

      2. "The minute the Treasury's printing presses went non-stop"

        Actually the signal should have been all the people being paid to be unproductive. And not so much for the brand new dollars but for the lack of productivity alone. We can manage the effects of the money printing press so long as there is enough productivity to soak up the majority of those dollars.

        1. We can manage the effects of the money printing press so long as there is enough productivity to soak up the majority of those dollars.

          put more bluntly --
          We can manage the effects of the money printing press so long as there is enough SLAVE production to soak up the majority of those dollars.

          With the expansion of automation and machines in this day and age there really is no excuse why it takes two full-time employees to have a roof and food. A D.C. hijacked trading medium (i.e. representative labor) and a government toting guns and committing vast amounts of theft is the only explanation.

        2. On top of the free money and the restraints on trade, the Fed was also buying 120 billion dollars a month worth of Treasuries and mortgage backed securities, to keep interest rates low and prop up the stock market and the housing market. No one ever seemed to think about what would happen when they had to unwind that buying and raise rates.

    2. Raphael Bostic, the president of the Atlanta branch of the Fed, said, "I'm really not expecting us to see a spike in inflation that is very robust in the next 12 months or so."

      A year ago I went to Bostic's message and statement page on the Atlanta Fed website: I was horrified as it dwelled on racial grievances and could have been dictated by Al Sharpton!

      There is a spreading cancer in our country: High ranking government official who are supposed to represent ALL Americans are using their power and high visibility to act as extremists tarring America as racist.

      Two who come to mind (they are loved by MSM) are Pete Buttigieg, Transportation Secretary; Barbara Ferrer, top health official at the most populous county at 10 million residents-Los Angeles County.
      No medical doctor, Ferrer received her Ph. D. in Social Welfare from Brandeis University, a Master of Arts in Public Health from Boston University, a Master of Arts in Education from University of Massachusetts, Boston, and a Bachelor of Arts in Community Studies from the University of California, Santa Cruz.

      Hundred of white and Asian candidates, with better credentials never had a chance (beyond the token CYA job interview).

  4. "As the greatest inflation spike of the last 50 years occurs, the utter failure of economists, their models, and many pundits to foresee what was coming is worth highlighting."

    But Buttplug swore it was only affecting the price of spittin' tabaccy.

    "How Did the Fed Not Anticipate the Inflation Surge?
    We were told it would be "transitory." But inflation continued to rise."

    They actually did, but were just using a little bureaucratic technique popularly called "lying".

    1. Yes, they were lying. No one, not even the fed, is this stupid.

      1. Agreed. They lied, through their teeth. And a reckoning should be forthcoming.

        1. And, they are still lying. I go to the grocery store twice a week. Price increases are way more than the government officials will admit.

  5. Economists manage the economy the same way my kids fill a bath tub. All the way hot until the water is too hot and then all the way cold until it's too cold.

    I guess my point is that the Fed and government are a bunch of reactive children who don't stop and think before the do something, anything, to fix whatever situation they find themselves in at that exact moment.

  6. >>We were told it would be "transitory." But inflation continued to rise.

    do you write from a position of "I'm surprised by this even though I've been writing political economic articles forever" or from a position of "no duh I've been writing political economic articles forever"?

    1. To be fair, it was "transitory." It transitioned from high to higher.

  7. Not complicated answer. Inflation is caused by the combination of global supply issues, high consumer spending, low unemployment, and the stimulus bills. Those are variables that are almost impossible to correctly predict a year in advance. Economics is not a science that can be predicted by equations.

    Also when the stimulus was passed the choice was risk major recession or risk increased inflation. Recession would have been worse.

    1. Sorry, I meant can not be predicted by equations.

      1. So it is "impossible to predict" that shutting down the economy and screwing up the supply chain while printing money was going to cause inflation? Really? Is that your final answer?

        1. He’s kinda stupid that way.

    2. Only if by "impossible to predict" you mean "obvious to anyone who thought it about it for 10 minutes, but we didn't know it would be THIS bad."

      1. I like these rhetorical questions “libertarian writers” throw out there. The answer is they lie. Always

  8. Because they lied/ They are political actors who do not care about the truth.

    Why is this so hard?

  9. Because they lied/ They are political actors who do not care about the truth.

    Why is this so hard?

    1. If you are DeRugy it is.

  10. US #68 highest 2021 inflation rate among 191 countries.

    https://www.gfmag.com/global-data/economic-data/worlds-highest-lowest-inflation-rates

    It's almost like production shut down worldwide because of a pandemic and demand is now soaring causing prices to rise.

    The worst thing the Fed can do is accept blame for a problem they didn't cause and throw the country into a tightening cycle then recession.

    Oh, wait --- that is exactly what conservatives want!

    1. Yeah, because issuing bonds and then printing the money to buy them back isn't going to drive any inflation, right? I mean, if nothing is created except more paper dollars, that won't effect the value of a dollar, right? Monetizing the debt isn't rocket science, it's insanity.

      1. Buttplug is dumb as a post but makes up for it by being a pedophile and insane.

      2. Let me explain how things work for you:

        The Treasury issues bonds - not the Fed.

        When Trump spent $2.2 trillion on the CARES Act the Fed was purchasing Treasury bonds.

        Those bonds remain on account at the Fed on their massive balance sheet.

        the US Dollar is doing just fine.

        1. The treasury issues bonds and then the Fed buys thus pumping up the money supply. It is how the government prints money.

          Can you please just shut up. Really, everyone is embarrassed for you.

          1. That is what I said, dumbass.

            1. That is not what you said at all./

        2. And the Fed keeps rolling over the debt and funding more and the government keeps spending it without producing anything. No problem there, amiright?

        3. And the Fed paid far more for those bonds than anyone would have with their own money (keeping the rates artificially low and creating a stock market bubble and a housing bubble). And now as rates go up the value of those bonds goes down even more.

    2. Rising demand is partly caused by the pandemic fatigue, but explains only a fraction of it. The big cause of the rising demand is the rise in the supply of money. More money chasing the same amount of goods.

      We know what causes inflation. Injecting trillions into the economy during Trump (yes, Trump) and Biden has an effect, and that effect is inflation. We know what happens when you have trillion dollar currency drops. It's called inflation.

      1. Yes, that is the generally accepted view of economists.

        (for the record I opposed the massive spending by both Trump and Biden)

        Again the dilemma is this - should the Fed inact six or seven rate hikes to cure this "inflation problem" that will almost certainly put us into recession?

        1. Yes it should, because a recession is the price that must be paid to stop inflation. Inflation is much worse than any recession. It is only a "dilemma" for someone who is retarded.

          1. Okay, now we have had a rare successful exchange.

            I disagree but at least we have the right parameters down.

            I would "taper" - immediately stop buying Treasuries (both agency and general bonds) and postpone any talk of a rate hike until summer.

            1. The true fix is to CUT SPENDING! But I repeat myself.

        2. Kinda seems like trying to dump trillions into an economy with supply problems is really stupid.

      2. More money chasing fewer goods. The lockdowns and pandemic lunacy greatly reduced supply.

        1. Again the dilemma is this - should the Fed inact six or seven rate hikes to cure this "inflation problem" that will almost certainly put us into recession?

          Answer this.

          (my answer is let the markets correct prices by increasing supply - which is happening in the oil and gas markets now. We are setting records for oil and gas production)

          1. SBP2....You asked a direct question. I shall answer.

            Again the dilemma is this - should the Fed inact six or seven rate hikes to cure this "inflation problem" that will almost certainly put us into recession?

            Answer: Yes. It does not axiomatically follow that recession is inevitable with interest rate hikes.

            BTW, I agree with your point about the energy market. Think of how much more oil production (and tax revenue!) we would have from the cancelled pipelines (i.e. like Keystone) moving oil from the ground to ships (for export).

            To lower energy cost, supply has to increase. We should be drilling like crazy right now. And shipping all the nat gas we can to Europe, while we can.

            1. Perhaps.

            2. And growing more spittin tobaccy, it’s the foundation of our economic system.

          2. Again the dilemma is this - should the Fed inact six or seven rate hikes to cure this "inflation problem" that will almost certainly put us into recession?

            As painful as it would be, yes. Though it will never happen because the biggest debtor in the history of mankind, the federal government, really likes those low interest rates.

          3. they should do this anyway because these non existent interest rates are a fraud.

            at some point we'll have to take our medicine, may as well be now.

          4. The Fed doesn't even have to raise rates. It can stop buying bonds itself and see what the market rates really are.

    3. "that is exactly what conservatives want"

      LIES, LIES, LIES.... All the leftards know how to do..

      CARES Act; Sponsored by Joe Courtney DEMOCRAT

      No recorded final vote because the DEMOCRAT quorum president Anthony Brown THWARTS the vote.

      DEMOCRATIC leaders ultimately got around Massie’s request by ruling it out of order with enough bipartisan support to make their maneuver stick.

      Democrats are the worst kind of people. Even their very own mistakes they PROJECT onto the other side as-if they weren't the one's with their hands in the cookie jar.

  11. The problem is not that they over modeled. The problem is that they pick and chose the models they knew would give the answers they wanted.

    1. What is the solution?

      Rate hikes?

      Or let the market correct a supply imbalance?

      1. Fiddling got us into this mess. Stopping the fiddling is the only long term solution. Maybe we do rate hikes for the short terms, but in the long run we need government to stop fiddling.

        And by fiddling I don't mean bluegrass.

  12. As the greatest inflation spike of the last 50 years occurs, the utter failure of economists, their models, and many pundits to foresee what was coming is worth highlighting.

    Bullshit. Bullshit. A thousand times bullshit.

    MMT theorists and Keynesians may not have been able to see what is coming, but Austrian economists and anyone else with a lick of sense have been telling you for 4 decades that if you keep spending money you don't have, keep printing money so you can kick the can down the road, you will wind up exactly where you are now: facing skyrocketing inflation and at the verge of civil breakdown. The surprising part is how much sheer fuckery the government would engage in to make sure the piper didn't have to be paid while they were still in control. But the piper had to be paid from the first time the govt rejected anything like a balanced budget in the 70s, everything since then have been delaying tactics.

    Some NPR article about how "people surveyed" thought inflation was going to be down to 3.5% at the end of the year. They mispronounced "morons": it came right after an article about how the cost of traveling nurses has tripled. Rents are up 40%, but asking people "what they might rent their houses for" allows the govt to put it into the CPI as 4%. No fast food joints can hire any workers to show up, paying twice the minimum wage.

    Any honest economist will tell you a hard rain is gonna fall. But you people still would rather listen to the ones that tell you shit is going to start smelling like roses. That's on you, Only you.

    1. By then, inflation had reached a staggering 6.8 percent.

      Including asking people how much they might rent their houses for, the government has made a number of changes in how it calculates inflation. One estimate I've seen is that actual inflation may be as high as 15%.

      1. Government has been changing the definition of inflation for decades.

      2. Well I don't do spittin' tobaccy these days, but my six pack of IPA went up from 7.99 to 8.99, which is about 12.5%, so you're not far off.

        1. Some commodity food items like dried beans that I buy have gone up 61% at the local Target.

    2. MMT only works if you burn an amount of money equal to the amount you print. It is plain as day right in the equations.

      1. Even Keynes said you had to cut back spending in the boom times. But government wants to always spend so they came up with MMT as a replacement for Keynesian econ.

        1. It's all rationalizations to consume before producing. Something must be produced before it can be consumed. These f'ers print to consume and then hope/wish/pray someone somewhere will produce more stuff. F'n parasites.

  13. Everybody wants to compare this inflation cycle to the 70s and 80s but there is a huge difference. Back then you could invest dollars in a CD and get a guaranteed 10% return. I know it sounds crazy but people would actually pay to use your dollars. In fact generations managed to retire by using a quaint old method we called compound interest. Pretty comical in retrospect but simply putting a portion of the dollars you earned into a savings account could produce a pretty hefty chunk of change in 40 years. This of course was before the FED and the political class began their relentless crusade to destroy the dollar. It seems that the investor class was just more important than grandma's passbook account. If she didn't get into Bitcoin a few years back she may be SOL. Well we'll see how that all works out in the years to come. This is not just the ineptitude of the Top Men who rule our lives. This is a decades long strategy to make the dollar worthless and it's been very successful. Nobody really knows what comes next but it won't be pretty.

    1. That's right.
      The last time, there was double digit inflation, and double digit unemployment, and double digit interest rates.
      And price controls.

      1. It's a brave new world and I don't see an applicable historic model. There is a lot more going on here than Zimbabwe. What is the future of the dollar's status as the world's reserve currency? When the rest of the world dumps the dollar 8% inflation will be the good old days.

        1. Point is not that dollar is slowly turning to junk and could lose it's reserve currency status; rather that if the rest of the world dumps dollars where do they put what they get out of the dump. Kinda like saying the US dollar is the tallest midget in the circus.

          Even with all it's weakness the US dollar is the most transparent currency in the world. China's history of devaluing it's currency at a moments whim (maybe a better description is every time it increases in value and hurts exports China pulls the rug out from underneath it) prevents it from being a reserve currency. No other country has enough currency to be a reserve currency.

          Kinda like investors may not like putting money in what seems to be an overvalued stock market but what other choice do they have. Gold, real estate, and everything else is way overvalued as well.

          It is hard to see how this turns out well.

    2. 10 year Treasury rates just hit 2.0%. With inflation above 7%.

  14. They knew. They anticipated. They lied. They are political.

    Remember, the alternative was admitting the democrats were deliberately destroying the economy in order to help justify full on fascism "for the children".

    1. You talking about the fed or the journalists? Anyone with the slightest lick of sense knew better but apparently it blindsided such progressive economic luminaries as De Rugy.

  15. “… inflation had reached a staggering 6.8%”. Anyone around in the ‘70s would not consider that staggering.

    1. Precisely.

      Especially since energy production is increasing.

      1. Borrow borrow borrow, spend spend spend, then hope/wish/pray someone somewhere will make more stuff!

        1. And they will gladly work hard and make more stuff for dollars that are worth less.

  16. They didn't anticipate the inflation because they run on a land of fantasy. Take a look at some of the quotes listed in the comments.

    https://simulationcommander.substack.com/p/inflation-and-you?utm_source=url

    We tend run into huge problems when monetary inflation is increasing quickly and the number of goods and services in the economy is not. I’m guessing those of you old enough to remember the Jimmy Carter years remember stagflation.

    Stagflation is an economic event in which the inflation rate is high, economic growth rate slows, and unemployment remains steadily high.

    Sound familiar? This is exactly what the government’s response to covid (not covid itself) created. They flooded the country with dollars while also shutting down places that actually create the goods needed to grow. Now even the zoned-out are noticing prices rise extremely quickly. And once the fake economy of being close to the people running the money-making machine overtakes the real economy of voluntarily providing goods and services, the wheels come off the bus.

    Unfortunately for us, Joe Biden has a plan to tackle inflation. He wants to print and spent trillions MORE dollars so that you pay ‘less’ for stuff like drug prescriptions or child care! Remember how Obamacare was going to save you money on healthcare costs but you never actually saw any savings? We’re going to take that ‘efficiency’ and spread it out to MORE places! He wants to crank that wave machine up to 11, and he claims this will LOWER inflation. But it will do the opposite.

    ‘United wishes and good will cannot overcome brute facts. Truth is incontrovertible. Panic may resent it. Ignorance may deride it. Malice may distort it. But there it is.’

    Winston Churchill

    This is a major problem for the Biden administration in particular and way too many of our current ‘leaders’ in general (and by extension the rest of us). They believe something is true, and think that strong enough belief will conjure it into reality. So they spend millions on the homeless in Seattle and don’t make the problem any better. They dole out millions to schools to ‘safely open’ when schools never needed to be closed in the first place. Billions get spent on high-speed rail, only for the cost to continue to climb while still having no high-speed service. No matter! They will throw good money after bad! After all, if they stop spending money, they might have to return some of that cash. Better to light it on fire!

    With regards to inflation, the Biden administration first claimed that the problem was temporary. Then they shifted the to blame ‘greedy’ businesses (who all decided to get greedy at the same time, I guess?), an excuse that continues today. He’s still fighting to pass multi-trillion dollar bills, claiming they won’t add to inflation — while admitting Americans are already getting ‘clobbered’ by it. There’s simply no admission — or even the inkling of one — that terrible monetary policies over the last couple years are to blame.

  17. They knew. They just fking bold faced lied.

  18. You mean, the government can't be trusted? Say it ain't so, Reason!

    1. If government would quit interfering the laws of supply and demand would correct things. Unfortunately, the government insists on trying to repeal the laws of supply and demand. When I heard someone speaking of price controls the other day, my first thought was "oh shit, they are going to increase the pain".

      It's like when the government pays farmers to not grow a particular crop in order to keep prices at a certain level. That's foolish. If there is too much of a product, prices will naturally fall and the farmers will self correct without government interference. But, no! Government do-gooders have to interfere. Plus, the main problem with the supply chain is government regulations which are putting a crimp on how and when products can be moved.

      1. Government do-gooders have to interfere.

        Also; Rightfully named treasonous traitors who ignore the US Constitution. (the people's law over them) of which a hug pact of these traitors pridefully announce their plans to take-over the USA with a Nazi-Regime (syn; National Socialism).

    2. Fun fact: Today Fox news quoted Reason, and stated they were a "left leaning" site.

      1. Fact check: True

  19. Oh great. Now everybody's a fucking expert on macroeconomics and global finance.

    The Fed has been the only halfway-decent acting government body for the last two years. Could they have moved a little more quickly? Yes. But they have a twin mandate-- full employment, and stable prices. And they didn't want to clobber the economy with rate increases when people were starting to get back to work. They will start raising rates next month, and then over the next several years we'll see if they can handle the problem.

    No one at the Fed right now is pandering to this administration. The failures of inflation, vast economic dislocation and impending recession get lain squarely at the feet of Biden and his thoroughly incompetent cronies.

    Jesus fucking Christ. If you want to start ripping the heads off public servants-- and I sure as hell do-- start at the White House, then proceed directly to Capitol Hill. The Federal Reserve is way, WAY down the list.

    1. We've had near zero rates since 2009 and why exactly does the FED have the monopoly on the value of dollars? The market is fully capable of deciding that just like everything else.

      1. And the market does decide-- the Fed only influences long rates obliquely, when markets decide that it will or won't control long term inflation. When Volcker's Fed jacked rates around 1980 it took years for the market to decide he was serious, and for long rates to start to come down.

        It may take years this time, too-- but largely because no one believes Congress is serious about controlling Federal spending. When rates go up, we still won't believe they're serious. And if they don't get serious, there will be nothing the Fed can do.

        1. Perhaps avoiding the starvation and civil war that other Nazi-Nations inevitably turn too is the whole point of gripping about FED slavery money.

    2. The Fed has two reasons for existing. 1) Protect it's member banks from their irresponsible lending and 2) government goes along with it because the Fed enables the government to spend far more than it takes in. The rest is bullshit window dressing.

      1. My hovercraft is full of eels.

    3. Right, the years of the printing press running unchecked then the intentional grinding of the economy to a halt couldn't be included in the projections because...reasons. funny how perfectly predictalible consequences are such a shock and there is no shortage of willful idiots willing to proclaim a job well done for failure.

      1. Dude, the Fed isn't the one overspending. It's Congress and the Executive that have chucked budgeting and fiscal restraint completely out the window for the last couple of decades. By comparison to the chimpanzees on Capitol Hill the Fed has been a model of discipline and competence.

        The notion of "anticipating" inflation over a one-year period is ridiculous. Inflation changes are much more fundamental and happen over much longer periods of time.

  20. The "experts" have been wrong on so many things over the past few (hundred?) years, you would think people would stop listening to them or at least get a new crop of experts.

  21. Haha, money printer go brrrr

  22. The Fed was created in 1913 to stabilize the economy. It took them only 16 years to bring on the Great Depression.

  23. My guess is that the smart people in the fed probably did anticipate the inflation, on some level. Marxists simply do not practice what they preach. It's just a continual con game. They preach to the masses the utopia is always just around the corner. We just have to murder the Kulaks. We just have to identify the wreckers and murder them and then heaven on earth will arise spontaneously thereafter! The pandemic won't end until everyone is wearing 10 masks!

    And as I keep saying part of the economic con game involves bullshit economic theorizing. The usual Marxist economic theory is basically nothing more than a Nigerian prince advance fee scam. "Let's give mother's free childcare and the economy the economy will grow!" I keep pointing out that if they really believed their own words they'd see investment potential and wouldn't see the need to bother with the Robin Hood forcible redistribution act.

    They're treating inflation the same way. They've got to "stimulate the economy" by printing money. Once again the basic claim is that transfer or resources (this time through inflation) is needed to maximize overall productivity. If they believe that then why aren't they investing their own money and making a profit instead of printing money? I don't think I've ever heard an honest answer to that question. Instead the same idea is just repeated over and over again sort of like a Marxist boot stamping on a capitalist face forever.

  24. This is a horrible mischaracterization of the inflation surge. That surge started in early 2020, in stocks. The Fed and the Treasury handed out massive amounts of corporate welfare, inflating those assets completely out of proportion to the real economy.

  25. sorry...when companies and corporations have record profits and claim no control over price increases, it just points out that we do not have a capitalist system. Corporations and Financial industries have stolen our government.
    The system is so effed.

    1. And the mistake point was....... Compulsive *illegal* Violations of the US Constitution. It wasn't that long ago media actually acknowledged it - now it's not even news with Nazi law violated the Constitution. Everyone seems to have sold out down river to a Democratic National Socialism theory instead of a Constitutional Union of Republican States.

  26. They didn’t fail to anticipate inflation, they knew through there years of policy , quantitative easing and out of control federal spending that it inevitable.
    No one want to be the bad guy and pull the bandage off the wound and cut of the gangrene limbs.

  27. It was not a failure to anticipate, it was a lie to cover up for Biden's destructive policies. It was certainly a stupid lie, and they had to know time would expose the lie.

  28. Funny thing is dumbos claiming full employment or near full employment with the labor participation rate in the tank. Depending on who you believe we are still about three million (or more) fewer employed people than before COVID hit. So riddle me this Batman how can the unemployment rate be lower now than it was back then. Maybe it is all those illegal aliens Biden sent back to where they came from.

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