Fair point, the Fed is not responsible for politicians using fiscal stimulus flippantly to buy votes.
I think nobody had much issue with the first fiscal stimulus in 2020. In the light of near complete shutdown of the economy, massive job losses, the deflationary environment was real and palpable. But the second (Jan 2021) and third stimuli (April 2021) were unnecessary, especially the third which was pushed after vaccines started getting rolled out to a large portion of the population. And while the first fiscal stimulus was justified in not being targeted due to time constraints to implement something better, for the second and third, there was no excuse in having it distributed to this large a population.
Again the Fed had no control over these unnecessarily broad handouts. But the Fed should have taken into account the amount of money injected in the economy by these stimuli in the decision about when to start raising rates. By mid 2021, economy had restarted to a large extent, jobs had recovered most of the losses compared to pre-pandemic. There was no excuse to not start raising rates slowly in Fall of 2021 when it looked like inflation was starting to increase knowing there was pent-up demand fueled by the fiscal stimuli.
For evidence, this thread was started in 10/21 when there was already well documented concerns from a lot of experts about inflation. The Fed blamed it all on supply chains disregarding other sources. And they ended up acting 6 months too late. It would not have stopped inflation altogether but it could have prevented some at least, and considering the inertia of the impact of rates on inflation it could have shortened the return to more manageable inflation levels.
The thing that makes me question their expertise is that they were literally the last one to admit that raising rates was needed where they should have been much better positioned than most to predict inflation based on fiscal stimuli and their own high balance sheet.
The Federal Reserve Bank of San Francisco | September 14, 2018
San Francisco, California â The Federal Reserve Bank of San Francisco announced today that its Board of Directors has appointed Mary C. Daly '91 MPhil (Econ)/'94 PhD (Econ)to the position of president and chief executive officer, effective October 1,
Possibly. My own involvement only goes back to circa 2008, plus or minus.
Since then Iâm remembering wellhead prices in the range of $2 to $3. And at this time of year (shoulder season) the prices would generally be heading south; coming of spring and all that, you know.
But $6+ NG . . . . I do not remember that since I became involved! It makes things very tough for our customers . . . . who are Americans in the main.
The US treasury yield curve is basically flat from two years to 30 years. Supposed to mean something. Of course all of them are far below the inflation rate
Biden fights inflation by attempting to bring oil prices down. Of course there might be unforeseen consequences. From Bloomberg:
Bidenâs Oil-Relief Plan Seen Backfiring as Drillers Dig In Heels
Reserve release lowers new drilling incentive, analysts say
Biden grappling with Russia pressure, gasoline prices, climate
U.S. President Joe Bidenâs plan to tackle record gasoline prices with an unprecedented release of emergency oil reserves may stifle domestic crude drilling just when itâs needed most.
âItâs silly to think that increasing fees on producers will result in lower energy prices,â said Anne Bradbury, chief executive officer of the American Exploration & Production Council, which represent shale explorers. âThis is more about political scapegoating and finger pointing rather than resolving the underlying issues of supply and demand imbalances. A more constructive approach would be to incentivize domestic oil production over the long term.â
The dispute comes at a difficult political moment for Biden as he seeks to punish Vladimir Putin with sanctions that inhibit Russian oil exports while seeking to tamp down pump prices just months before key elections. Earlier this month, U.S. Energy Secretary Jennifer Granholm pleaded with oil executives at a Houston conference to boost oil production for the good of the country â to little effect.
U.S. oilfields are pumping about 11.7 million barrels a day, about 10% lower than they were prior to the outbreak of the Covid-19 pandemic, despite the doubling in domestic crude prices since the beginning of 2021.
Biden and his ivory tower elitist administration are completely out of touch with the real world.
Any idiot could see this. I donât blame President Joseph Biden for not seeing it, as he has a̶ ̶k̶i̶c̶k̶b̶a̶c̶k̶ ̶e̶m̶p̶i̶r̶e̶ family issues to deal with. However, this says a lot about the people who are supposed to be advising him ⊠or his judgement.
The U.N. Food and Agriculture Organization [FAO] said its Food Price Index, which tracks monthly changes in international prices for a basket of commodities, [was] up 12.6% from February. As it is, the February index was the highest level since its inception in 1990.
Urgent action like more weapons for Ukraine to prolong the conflict, which weâre happy to provide. Paying poor people abroad extra money for higher food and energy prices, eh, probably not so much.
Supply chains getting somewhat better, on the US port side anyway
While port congestion has worsened in China lately because of lockdowns, port congestion in other places has improved significantly since the end of last year. According to Clarksons Research, the number of vessels outside Long Beach has gone from over 80 vessels in November to 30 vessels now. The number of ships waiting outside Long Beach was already below 40 in January, but the average voyage duration for China-US West Coast increased from 36 days in November to 47 days in January, counteracting the reduced waiting time. Now, however, waiting times are lower, and voyage duration is back down to 33 days.
San Francisco, California â The Federal Reserve Bank of San Francisco announced today that its Board of Directors has appointed Mary C. Daly '91 MPhil (Econ)/'94 PhD (Econ)to the position of president and chief executive officer, effective October 1,