How Are We Fighting Inflation Around the World?

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Comments (2)
  1. Rick Shapiro says:

    What we are seeing here is another example of central banks overreacting because of their intrinsic impotence in dealing with sever shocks.
    In 08, the lack of sufficient fiscal stimulus meant that the fed couldn’t ameliorate deflation without provoking asset inflation.
    Today, the fed’s overreaction will provoke a recession. Although it’s true that supply shocks have diffused into more general inflation, inflation was initiated by, and is still sustained by, supply constraints, particularly in oil. Most supply constraints other than grain are visibly easing; but oil prices are still maintained by a combination of the Ukraine war, continued cartelization by authoritarian regimes, and investment reaction to the recent fracking bust. Unfortunately, the fed’s flirting with deflation exacerbates that last item.
    The fed’s logic appears to be: Something must be done: This is something: Therefore we must do it.

    1. Elaine Schwartz says:

      Rick- I agree with all you say but could not imagine the Fed not responding.

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