The Fed’s Policy Mistake: “Buying” More Inflation Will Lead To Financial Instability

The Federal Reserve’s new policy of inflation “averaging “ is a mistake. The trade-off nowadays is between inflation and financial stability. Buying more inflation will eventually create, if it has not already, financial imbalances that will trigger an economic crash. The parallel to this is the misguided policies of the 1970s. Back then policymakers found buying more employment with a little more inflation did not work. Facts Don’t Support Policy Change Federal Reserve policymaker’s argument for the policy change is that consumer inflation has been consistently running below its 2% target. Also, sustained … (full story)

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