Don’t Thank the Fed
Today’s inflation has been a supply-side story, as Roosevelt’s Joseph Stiglitz and Ira Regmi have written.
The Fed’s recession-risking interest rate hikes, meanwhile, are a demand-focused strategy—and one that shouldn’t get undue credit as inflation comes down.
“Slowing inflation has not resulted from changes in demand or the labor market but because supply chains are gradually easing and shortages are abated. Yet the Fed continues raising interest rates and flags an ‘out-of-balance’ labor market as too tight,” Regmi writes in a new blog post.
“As overall inflation slows . . . there isn’t a strong argument for curbing inflation by reducing wages and jeopardizing jobs.”
Read more in “As Inflation Slows, Don’t Credit the Fed.”
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