They are willing to risk inflation to avoid a recession. Great that stewardship of the economy takes a backseat to politics.
This...
Fiat currency means never having to say you’re sorry.
Sailing a big sailing ship in almost zero wind. Very small and carefully measured responses over time and distance.
Here is a great article about LBJ and the Federal Reserve Chairman of his day:
https://www.zerohedge.com/markets/now-it-all-makes-sense
The bottom of the article discusses this history.
LBJ physically intimidated the Fed Chair and forced him to reverse course so LBJ could get re-elected....
and then after all that LBJ did not even run again—while inflation exploded out of control for the next decade and beyond...
If the Fed pursues really stupid policies all the way through to December 2024, one of two things will happen —
1) The policies will make things look good and help the Democrats win in 2024. After that, things may totally crash. But the Democrats don’t care about that. They are still fundamentally transforming the country.
2) The policies might help spook people and Trump might win in 2024. After that, things may totally crash. Which will allow the Democrats and the Media to say that Trump is in charge of the worst economy since the Great Depression. They will impeach him for these crimes against humanity.
So ... they really can’t lose either way.
The deep state has crashed rates. Powell has raised rates and still the rates are going down. And the deep state has thrown over ten trillion dollars at the economy. Guess what happens if Trump wins. They will try to tank it.
The FED is hoping to help reelect Biden.
But, as the economy heats back up, so will oil prices and inflation, by summer, and we can see Powell having to back off further rate reductions.
Desperately trying to delay the onset of Depression number 2, “D2” lets call it, until AFTER the 2024 election.
Not only crash rates markets are unstable and yoyoing banks closing inflation a chain reaction.