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Federal Reserve boss Jerome Powell sent stocks tumbling with a speech vowing an unrelenting fight against inflation by raising interest rates. He admitted that means slowing the economy and inflicting pain.
Recommended video: Fed Chair Powell doesn’t understand what the causes of inflation are and were, says professor
This episode of What’s Ahead lays out why Powell’s prescription is profoundly wrong. Austerity is not the cure for inflation; stabilizing the value of the dollar is.
Also discussed is how Powell has fundamentally misread the lessons of the seemingly intractable inflation of the 1970s.
Sadly, Powell’s views reflect mainstream economic thinking. We’re in for totally unnecessary turbulence.