Fed needs a recession to win inflation fight, study shows | Hacker News Reader

Fed needs a recession to win inflation fight, study shows

reuters.com

26 pointspera11 comments

It is always the same cycle.

They FED increase the balance out of thin air by massive quantitative easing. If the money reaches the public, unlike 2008 when it only covered holes, inflation arises.

Then they need to create a recession, by increasing interest rates, to solve inflation.

And then they need to lower those rates to get out of the recession. And we go back to the first point.

Simple.

Sounds like unnecessary bureaucracy on top of an inherit cycle to me.

Not quite . The banking system naturally creates new money during booms and destroys it during busts. In theory, the federal reserve is supposed to act as a counterweight leading to stability. In practice, it usually accentuates those trends due to political pressure - during bull markets like 2009 thru 2021, people think it’s a new normal and money printing even more is ok. Meanwhile consumer inflation stays low because everyone is putting money into assets that are going up exponentially.

Think about how your confidence in yourself affects your future earnings expectation and your willingness to take on debt or pay it off. that confidence can change over night due to internal and external factors. So you yourself also create and destroy money with your changing confidence.

But they need inflation to payoff the trillions they just printed and to service foreign debt.

Rock meet hard place. If history is anything to go by, the proletariat will suffer for these entirely preventable and repetitive acts of overt corruption.

They've been printing since 2008.

The trouble was giving money to the plebs to be price gouged.

https://fred.stlouisfed.org/series/FGEXPND ;

https://fred.stlouisfed.org/series/M318501Q027NBEA ;

https://fred.stlouisfed.org/series/A091RC1Q027SBEA ;

Recession is just going to make the gov income lower, spending higher. There's no getting out of it now.

Almost a trillion in interest payments alone. That can't be too healthy.

Well at least we will all be hurting.

They are making a prediction of the future based on 16 data points. In a profession notorious for being bad at making predictions, especially about recessions. This is not science. I have to ask is J.P. Morgan in a position to make a profit on a recession?

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