The Fed Has a Hammer, and You’re a Nail

Our present moment is precarious. Like it or not—we don’t—we live in the age of Central Banks. And as we witness, and alas participate in, the global drama to create or destroy wealth, there is a great and tragic irony at work.

On the one hand the rhetoric we hear from Fed Chairman Jay Powell and others of the central planning class that they are committed to doing what is necessary to save the economy and contain inflation. On the other hand, their primary weapon tool for accomplishing that agenda is raising the interest rates.

The irony!

In order to save, they destroy. In order to contain, they unleash. In order to stabilize, they destabilize.

It would be comedic, if it wasn’t so tragic.

This tweet expresses the irony well:

Let’s explore how the Fed’s blunt instrument will end up adding to inflationary pressures and make things worse for the economy.

Containing Inflation?

Our current inflationary woes go beyond the simplistic “money printer go brrrr” memes. We’ve covered this here, here, and again here. We will spare you those same arguments again.