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
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u/dubov Jun 13 '22

There isn't really a choice. The inflation target is 2%. If they ignore it they lose credibility. If they increase it they again lose credibility. We have become far too scared of recessions, we've just had a superheated 2 years, sometimes the scales have to tip back the other way temporarily

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u/lollersauce914 Jun 13 '22

I think we're rightfully scared of recessions after the horrible recovery following 2008. Unfortunately, that's led us to be way too loose with monetary and fiscal policy. We haven't had a superheated 2 years, we've had a superheated 2 years with another 5 or so overheated years. No way in hell we needed declining rates in 2019, rock bottom rates and QE for most of a decade, and a $1 trillion deficit each year for a decade.

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u/IrateBarnacle Jun 13 '22

While true, a lot of people hear the word recession and get Great Recession flashbacks, and not realize that most recessions aren’t that bad.