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“It’s a mirror-image reversal of Volcker’s inflation-busting and sets the stage for a pivotal policy move.”
“Powell, who will speak Thursday during a virtual version of the Fed’s annual Jackson Hole, Wyoming, conference, will outline what could be the central bank’s most active efforts ever to spur inflation back to a healthy level.”
“Central bank credibility is crucial. Currently, they don’t have any credibility that they can or are willing to allow inflation to be higher than 2%, and that’s a problem,”
Comment:
They Refuse to say WHERE they want this needed inflation. So I’ll say it. They need inflation in small business profits, so they can bring inflation in lower end wages, to bring in better tax receipts.
These people are in a fog. During the 1970s they blamed high wages for skyrocketing wages and higher commodity prices 1971 to 1981. Not removal of $35 gold backing in 1971. Dollar dropped commodities went inverse up. Cost of living went up. And that justified higher wages. NOT the other way around.
Low rates were not the problem, and stupid high rates to 21% was not the right cure. That killed real estate and stock prices for 10 plus years. Low rates is not the cure now as if higher rates prior was a problem. But now the net problem is general wages are too low to supply enough taxes to support gov’t obligations and avoid Gov’t debt.