The rates that the Feds control only really impact the velocity of money in the banking system. They had a lot more impact 30 or 40 years ago when the Fed wasn't also creating trillions of dollars out of thin air annually.
However, they aren't just raising rates now, they are decreasing their balance sheet. That will arguably have a bigger impact on slowing inflation than raising rates will.
But there's not much they can do when inflation is a result of resources becoming scarce between slowing trade because of covid, and now stopping trade with Russia. The whole economy has become much less efficient.
The rates that the Feds control only really impact the velocity of money in the banking system. They had a lot more impact 30 or 40 years ago when the Fed wasn't also creating trillions of dollars out of thin air annually.
However, they aren't just raising rates now, they are decreasing their balance sheet. That will arguably have a bigger impact on slowing inflation than raising rates will.
But there's not much they can do when inflation is a result of resources becoming scarce between slowing trade because of covid, and now stopping trade with Russia. The whole economy has become much less efficient.
Covid is just market manipulation, just another attempt at kicking the can down the road.
Covid is just market manipulation, just another attempt at kicking the can down the road.
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