{"id":416852,"date":"2022-03-16T02:51:38","date_gmt":"2022-03-15T23:51:38","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/the-fed-must-raise-rates-to-choke-off-the-inflation-it-created\/"},"modified":"2022-03-16T02:51:38","modified_gmt":"2022-03-15T23:51:38","slug":"the-fed-must-raise-rates-to-choke-off-the-inflation-it-created","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-fed-must-raise-rates-to-choke-off-the-inflation-it-created\/","title":{"rendered":"#The Fed must raise rates to choke off the inflation it created"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a9a605fd92\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a9a605fd92\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-fed-must-raise-rates-to-choke-off-the-inflation-it-created\/#%E2%80%9CThe_Fed_must_raise_rates_to_choke_off_the_inflation_it_created%E2%80%9D\" >&#8220;The Fed must raise rates to choke off the inflation it created&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CThe_Fed_must_raise_rates_to_choke_off_the_inflation_it_created%E2%80%9D\"><\/span>&#8220;The Fed must raise rates to choke off the inflation it created&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<div class=\"inline-module inline-module--columnist inline-module--author\">\n<div class=\"inline-module--author__img\">\n            <img decoding=\"async\" width=\"76\" height=\"69\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76&amp;h=69&amp;crop=1\" class=\"attachment-nyp_columnist size-nyp_columnist\" alt=\"Charles Gasparino\" loading=\"lazy\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=152 152w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=114 114w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76 76w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=38 38w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png 706w\" sizes=\"auto, (max-width: 76px) 100vw, 76px\"\/>      <\/div>\n<\/div>\n<\/aside>\n<p>Jerome Powell could begin to fix the mess he helped create even if it might upset the markets for a bit. He could raise short-term interest rates higher than investors have priced in and announce that inflation is so bad that the Fed will significantly reverse the size of its balance sheet.<\/p>\n<p>Of course, Powell won\u2019t do that when he unveils his new interest-rate policy Wednesday because in doing so he would have to admit to one of the biggest monetary-policy blunders in recent history.<\/p>\n<p>It was Powell who promoted the panacea of \u201ctransitory inflation.\u201d As we all know now, it was a cynical PR stunt designed to fool the American people that there would be no consequence to his historic money printing (in the trillions), low-interest rates and support of President Joe Biden\u2019s trillion-dollar spending sprees well past the time that COVID was squeezing growth from the US economy.<\/p>\n<p>Talk about cynical: The \u201ctransitory inflation\u201d meme also helped Powell win Biden\u2019s blessing and re<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointment to another term as Fed chair since it helped the president sell his spending plans until Sen. Joe Manchin said enough.<\/p>\n<p>Enough should have happened sooner, of course. Between the money spent by Biden that literally paid people not to work and the dollar printing by Powell, our Fed chair is now finding himself in the tightest of tight spots. He is tasked with corralling a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.oleantimesherald.com\/news\/nation\/consumer-prices-rise-nearly-8-causing-major-inflation-fears\/article_0939cdc1-657e-5c33-a567-867529dcde0c.html\">Consumer Price Index rise of nearly 8%<\/a> for February, a measure of consumer inflation that is certainly in the double digits today since it doesn\u2019t take into account that war in Europe.<\/p>\n<p>That means additional inflation via higher oil and gas prices after we imposed sanctions against Russia over its invasion of Ukraine.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385532356.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"he price of gas continues to rise at a Marathon gas station on March 15, 2022 in Griffin, Georgia.\" class=\"wp-image-21539301\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385532356.jpg?quality=90&amp;strip=all&amp;w=2048 2048w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385532356.jpg?quality=90&amp;strip=all&amp;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385532356.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385532356.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Experts said that already record-high gas prices will continue to inflate during the Russia-Ukraine crisis.<\/figcaption><figcaption><span class=\"credit\">Anna Moneymaker\/Getty Images<\/span><\/figcaption><\/figure>\n<p>A belligerent China, meanwhile, is said to be taking advantage of our economic weakness and the global unrest by discussing buying <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/saudi-arabia-considers-accepting-yuan-instead-of-dollars-for-chinese-oil-sales-11647351541?mod=articletype_trending_now_article_pos4\">Saudi oil denominated in yuan <\/a>instead of US dollars. That would be a watershed moment underscoring that the US dollar may soon no longer be the world\u2019s reserve currency.<\/p>\n<aside class=\"single__inline-module alignright\">\n    <\/aside>\n<p>Powell, of course, has debased the dollar with his monetary-policy overkill. A more thoughtful soul would admit these mistakes and the pickle he\u2019s in and reverse course, telling the American people that if he doesn\u2019t act now, and decisively, the economy could end up in shambles.<\/p>\n<p>Inflation is a beast that\u2019s difficult to tame once it\u2019s fully unleashed. Wages rise in reaction to price increases and the vicious cycle leads to economic ruination because wages can never really keep up while foreign creditors dump dollars.<\/p>\n<p>It took Paul Volker years to squeeze spiraling inflation out of the economy in the late 1970s and early 1980s with stratospheric interest rates and a deep recession. Powell could say by taking strong action \u2014 a 50-basis-point increase in the so-called Fed Funds Rate (the shortest of short-term rates) and a significant move to im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>tely reduce the size of the Fed balance sheet (decreasing the money supply) \u2014 we might avoid that fate.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"681\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/38164200-1.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Cartons of one dozen eggs seen on a grocery store shelf in the New York City borough of Queens, NY, March 14, 2022.\" class=\"wp-image-21539319\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/38164200-1.jpg?quality=90&amp;strip=all&amp;w=2048 2048w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/38164200-1.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/38164200-1.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/38164200-1.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Inflation set a new 40-year record at 7.9% and the United Nations warned that global food prices could increase by 20% due to the conflict in Ukraine.<\/figcaption><figcaption><span class=\"credit\">Anthony Behar\/Sipa USA<\/span><\/figcaption><\/figure>\n<p>The markets might wobble for a while, and, yes, the economy might slow, but we would be spared down the road the economic Armageddon that has stricken other countries that experimented with the level of money printing Powell did over the past two years.<\/p>\n<p>But Powell will undoubtedly fill the room with bromides about the inherent strength of the US economy, announce a measly 25-basis-point increase and say something modest about the Fed\u2019s balance sheet that he will begin to unwind slowly.<\/p>\n<p>Markets might even cheer, but Powell is only delaying the inevitable. If he doesn\u2019t move decisively. private investors could take measures into their own hands, selling dollars and bonds in the face of the inflationary threat, leading to widening deficits and higher debt costs.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385541177.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"U.S. President Joe Biden addresses and event to celebrate Equal Pay Day.\" class=\"wp-image-21539478\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385541177.jpg?quality=90&amp;strip=all&amp;w=2048 2048w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385541177.jpg?quality=90&amp;strip=all&amp;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385541177.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/1385541177.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>President Joe Biden said the country\u2019s inflation predicament won\u2019t be \u201cpainless.\u201d<\/figcaption><figcaption><span class=\"credit\">Chip Somodevilla\/Getty Images<\/span><\/figcaption><\/figure>\n<p>A recession would also be baked into the economy under such a scenario, economists tell me, one more intransigent than if the Fed chair takes necessary action.<\/p>\n<p>President Biden recently told the American people that our current predicament won\u2019t be \u201cpainless.\u201d The pain could be a hell of a lot less nasty and a lot shorter if his Fed chair does the right thing.<\/p>\n<p>Barring a miracle, he won\u2019t.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/03\/15\/the-fed-must-raise-rates-to-choke-off-the-inflation-it-created\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;The Fed must raise rates to choke off the inflation it created&#8221; Jerome Powell could begin to fix the mess he helped create even if it might upset the markets for a bit. He could raise short-term interest rates higher than investors have priced in and announce that inflation is so bad that the Fed&#8230;<\/p>\n","protected":false},"author":1,"featured_media":416853,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/03\/newspress-collage-21538657-1647385168418.png?w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[126801,70550,70551,78738,991],"class_list":["post-416852","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-3-15-22","tag-federal-reserve","tag-inflation","tag-jerome-powell","tag-joe-biden"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/416852","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=416852"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/416852\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/416853"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=416852"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=416852"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=416852"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}