Fed Policy

[JohnRoberts]

I have long been critical of the dual mandate fed policy..  IMO managing both employment and inflation is one mandate too many...  I worry that thwarting the natural restorative consequence of recessions to remove dead wood from the economy and clear the way for stronger companies to prosper is unhealthy for long term growth...

As if two mandates wasn't bad enough, now the fed seems to be reacting to mission creep of adding yet another mandate (economic growth). We already enjoy record high employment and low inflation, yet there is still political pressure to reduce rates and juice economic (GDP) growth... 

IMO it is OK for President Trump to ask, he is not shy about speaking whatever is on his mind, but Powell needs to stick to his original job description and manage mostly the inflation (money supply).... employment does not seem to need help.  The economy will get sickly if too many weak sisters are kept alive past their expiration date, by too easy money.

Of course maybe I'm all wrong... 8)

JR

PS: Speaking of central banks has anybody noticed that Maduro has been secretly selling off Venezuela's sovereign gold? Apparently through Africa...  That will run out eventually too...

 

[iomegaman]

"Skin in the Game" by Nassim Nicholas Taleb...he advocates for smaller LOCALIZED government and letting the markets decide who survives...DC/Washington is notorious for having no skin in the game and thus disrupting the natural evolution of things...

 

[JohnRoberts]

"Skin in the Game" by Nassim Nicholas Taleb...he advocates for smaller LOCALIZED government and letting the markets decide who survives...DC/Washington is notorious for having no skin in the game and thus disrupting the natural evolution of things...

Yes, the founding fathers (is that sexist?) were very apprehensive about a strong federal government and stipulated many restrictions  on federal power.

Of course this is awkward when discussing fed policy since that whole institution is extra constitutional...

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The feds are using low inflation as an excuse to expand monetary supple with lower interest rates (inflation below 2% target). In my judgement there are already inflationary trends in place, like rising wages due to tight labor market. Strong fed actions almost always overshoot one way or the other. 

Maybe fed policy makers should turn off the twitter.

JR