The danger of a politicized Federal Reserve is that they will act contrary to accepted economic practices, ignore the data, and lower rates for the benefit of the political class that finances their vacations in Gstaad and publishes their idiotic memoirs for seven figure advances.
Hopefully the current tone among the Federal Reserve presidents remains, and they don’t start cutting rates until inflation is controlled…and that is going to take awhile. It’s even possible that they understand that the official inflation rate is an insulting joke played on America, and the real rate is probably double the propagandistic nonsense that emerges from the U.S. Bureau of Labor Statistics.
Fed Officials Say Don’t Bet on Rate Cuts Even If There’s a Recession
Two senior Federal Reserve officials threw cold water on investor hopes for interest-rate cuts anytime soon as they both expressed concern about stubborn inflation.
Raphael Bostic, president of the Federal Reserve Bank of Atlanta, highlighted the stickiness of inflation, while saying that he doesn’t anticipate any interest-rate cuts this year and, if anything, “we may have to go up.”
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, largely echoed that sentiment, although he struck a more dovish tone, saying that much of the impact from the Fed’s series of rapid rate increases is still in the pipeline. He said he’d need to see more data—in particular around tightening credit conditions—before committing to a bias on the future path of interest rates.
That all sounds nice, but until the ridiculous amount of transfer payments being made to employable Americans and, increasingly, employable illegals is tightly controlled, our inflation rate is going to remain high and our employment rate is going to remain artificially low.
The labor participation rate has dropped 4% in 20 years, and while that might not sound like much, that is a huge amount of production, tax payments, spending, etc. that has been permanently foregone.
And this chart is even more depressing!
Persons not in the labor force who want a job
Ignoring the distortion of the Wuhan Flu, the slope of that graph suggests that fewer and fewer people have any interest in participating in our economic growth, giving up on a significant upside and accepting the government support that has kept minorities in America as essentially chattel for 60 years.
But that is the plan! Create an entire nation of dependent drones who rely on the government for everything, and the concept of freedom, liberty, self reliance, entrepreneurial spirit — all the things that make up American Exceptionalism — will disappear.
How that massive welfare state is going to be funded is a question for another day, but I think the plan involves unicorns, creative accounting, and a lot of poverty, crime, and hopelessness.
But that’s a price that Joe Biden is willing for you to pay!