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Why the FED is Horrified by High Inflation.
It is perpetually haunted by the Ghost of Republicans Past.
Inflation has been running hot, to the point where even the Federal Reserve has blinked in its months-long game of chicken.
But that begs the question of why the game was even being played in the first place.
You might say that the Fed sees an incomplete recovery from the pandemic requiring the economic boost of low interest rates. Sure, the stock market is on fire and unemployment is low. But there are also an historic number of job openings, and wages aren’t keeping up.
You might also say that the Fed sees the economy starting to overheat, with $2,000 sign-on bonuses at low-wage jobs, an out of control housing market, and wealth inequality widening every day, necessitating an earlier than anticipated interest rate increase.
I say there’s another explanation: Social Security.
The Social Security Explanation
When Social Security was first implemented, Congress set the payment levels.
Every now and then they would look at some economic figures, agree on a payment amount that made sense, and lock it in place for a while.
