Federal Reserve
The Federal Reserve it can be argued has done a great job of propping up the economy during the Great Recession with its easy money policies led by Quantitative Easing 1, 2 and 3. However, the growth in the stock market and the low interest rate on our ballooning debt is artificial as a result of the Fed's policies. Dialing back of their latest bond-buying program, is the finesse move confronting the Fed for the next five years. If the Fed moves too fast, it could cool the recovery. If it moves too slowly, it could fuel asset bubbles or excessive inflation. With the stock market booming since the election of Donald Trump, these fears are heightened.

The Path of Least Embarrassment

from Maudlin Economics,

In my view, the Fed won’t hike rates until inflation becomes a political concern. Until the Biden administration starts looking at the polls and figures out that people are pissed about inflation and might pull the lever for the opposing party.

Now, Joe Biden has no clue how to stop inflation. He has stated that his $3.5 trillion spending plan will actually fight inflation, which is absolutely ludicrous. And his instincts around inflation are bad—he blames high prices on profiteering, and rather than pursuing a supply-side solution, he’ll attack producers for price-gouging, which will have the opposite effect. But I assure you that when inflation reaches double digits—which it will—Biden will phone Powell and ask for help fighting inflation.

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