The Fed is Lying to Us
High inflation is here to stay.
Photo by Joshua Hoehne on Unsplash
In a recent FOMC Press Conference on September 22, the chair of the Federal Reserve (the Fed), Jerome Powell, reiterated the Fed’s targets of full employment and inflation of 2%.
Powell acknowledged that the inflation rate has been elevated, blaming it on supply chain bottlenecks. He also stated that the Fed has tools to address higher than expected inflation if it becomes an issue.
Of course, there are two major issues with these remarks. First, the Fed does not acknowledge the role its quantitative easing (QE) policy has played in the sustained, increased rates of inflation. Since June of last year, the Fed has been steadily increasing the money supply, buying at least $80 billion in Treasuries and $40 billion in mortgage-backed securities each month.