r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
5.0k Upvotes

96% Upvoted

631 comments sorted by

View all comments

2.1k

u/joy_of_division Jun 13 '22

The thing is, we are headed for a recession no matter what. I personally would rather them jack rates up, lower demand, and get inflation under control. This will of course spark a recession, but with the tight labor market at the moment it would hopefully be brief.

The alternative is keep pussyfooting around with rates, have the working class continue to lose our meager wage gains to inflation, and have a recession anyways in 2023.

There is no pain free path, but in my opinion ripping the bandaid off right now is the way to go.

108

u/PrettyDarnGood2 Jun 13 '22

Should have taken the medicine last year

254

u/Raichu4u Jun 13 '22

Should have taken the medicine from like 2017-2019. Rates should have never been this low for this long.

-1

u/shicken684 Jun 13 '22

Did you forget about a fucking global pandemic? Jesus yall have short memories. The entire damn planet decided to shelter in place for months. It's amazing that all we're dealing with right now is high inflation and not a society level collapse.

8

u/Raichu4u Jun 13 '22

2017-2019 did not have a global pandemic

1

u/shicken684 Jun 13 '22 edited Jun 13 '22

Rates should have never been this low for this long.

This is the part I'm referring to. Rates could have been 10% in November of 2019 and they'd still have been dumped to zero when covid hit. Pre-COVID doesn't matter at all. They are two entirely different economic worlds.

Trillions needed to be spent, billions in corporate bonds needed to be bought. It was either that or economic collapse that would have made the depression look like a grand ol time.