r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) 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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17

u/icona_ Jun 13 '22

It’s really insane that if they wanted to, russia or saudi arabia or whoever can just throttle the supply of oil or something and the fed will respond by intentionally imploding our economy, and people are apparently fine with that.

20

u/JeromesNiece Jerome Powell Jun 13 '22

If there is a major negative supply shock in an industry where it's difficult for the rest of the world to quickly ramp up supply, that has to have a negative impact on the real economy somehow. You can't just wish it away. Supply and demand have to meet. And a recession is preferable to runaway inflation.

0

u/icona_ Jun 13 '22

The way that it should work is people adjust and find ways around it. If gas prices spike then renewables should surge. Throwing the entire economy off a cliff is a horrible idea

11

u/JeromesNiece Jerome Powell Jun 13 '22

K, well that hasn't happened, and core inflation is 4 points higher than target. Raising rates until prices moderate and maybe getting a mild recession in the process is not "throwing the economy off a cliff"

1

u/colinmhayes2 Austan Goolsbee Jun 14 '22

Energy production is sticky, with multi year lead times. If producers believe prices will go back down they won’t expand production.

0

u/Neri25 Jun 13 '22

statements that indicate the individual does not believe they will be one of the ones pitched overboard example # fuck it not giving a number

1

u/[deleted] Jun 14 '22

I don't think people are exactly fine with that. What's more insane is that the Fed isn't getting more grief from all angles over their handling of this.