Facing a strong economy, Fed puzzles over how to slow it down
Facing a strong economy, Fed puzzles over how to slow it down
Officials are trying to understand why consumer spending, the job market and overall growth have not responded to the most aggressive interest rates in decades.
Officials are trying to understand why consumer spending, the job market and overall growth have not responded to the most aggressive interest rates in decades.
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Understandable. Nothing's worse for the economy than a strong economy. /s
Economics is basically voodoo, isn't it?
Some of my worst grades were in Econ class because it’s really hard for me to get beyond the fact that the answers to Econ questions always have an asterisk at the end since we don’t know what the future will hold.
It’s like, yeah we say “all things equal” something should happen in a certain way. And in the vacuum of a classroom maybe that’s OK. But it’s really all just educated guesses. And really that’s the best that we can do, and maybe that’s just fine. But when I hear stuff like “economists predict [x]…” I kinda roll my eyes.
Economics 101 is like physics 101. It only makes sense in a vacuum, with no friction, and no vibration. Or to put it in economics terms, it only works with perfect consumer knowledge, no barriers to entry, and if the future is accurately predicted by the past.
So yeah, voodoo.
And as everyone knows, no actual economist learns anything more than econ 101
When consumer spending is very high, inflation continues to rise because there is not an increase in supply. (Consumers are spending more to effectively get almost the same amount of things as before).
This is, obviously, bad if unchecked.
The Federal Reserve is like a cat that can't make up its mind about whether it wants to be inside or outside.