The Fed, Regulation, and MMT – Irresponsible

March 23, 2021

You’ve got to hand it to the Federal Reserve. With the cleverness of a seasoned head coach – think Jim Boeheim leading Syracuse in the NCAA basketball tournament – they figured out how to accomplish a great deal while making it look like they didn’t have many tools at their disposal.

The market keeps expecting the Fed to bow to pressures to lift rates, and the Fed knows that it can’t keep interest rates at zero forever. But it wants to keep them there for as long as it can. So, how do they do that? Well, one way is to forecast higher inflation and real GDP growth so that if (and when) it occurs, you can say “well, that doesn’t surprise us at all.”…

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