Jackson Hole: Fed Chair Powell unveils effort to target ‘moderately’ higher inflation


Yahoo! Finance has the story Jackson Hole: Fed Chair Powell unveils effort to target ‘moderately’ higher inflation.

Federal Reserve Chairman Jerome Powell unveiled a new framework of thinking for the central bank that will tolerate inflation “moderately” above its 2% target. The Fed also committed to reviewing this policy every five years.

It would help if Powell understood how to create inflation before he tells us he is going to try to create it. Of course, the Fed perfectly well understands how to create inflation in the stock market, just not in the consumer price index.

Might the Fed ask itself, what did we do to cause inflation in the stock market that we might learn to apply to the consumer market? It might flash through their minds that they created $10 Trillion dollars to bail out the banks and Wall Street. The people they gave that money to tend to buy stocks. If they could conceive of giving that kind of money to consumers, then those consumers might actually want to consume consumer goods, thus raising inflation in the Consumer Price Index.

It’s amazing how experts can retreat into their think tanks to think deeply about a subject, and yet miss the obvious answers they pretend to be looking for.

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