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Comment by mjburgess | Hacker News Reader

They're still very far off actually making a difference, ie. you'd want the rate within 2% of the observed inflation, so c. 7%

I think they'll stop long before that because even at 10%, they're not going to be able bring inflation down -- most of the causes being supply-side

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Last time USA had a real inflation problem, Jimmy Carter pushed the fed and they jumped rates to 20%. That stopped inflation, as well as Carter’s re-election.

Biden’s own party is having cold feet about him running again. I don’t think they’ll make it viable for him to run. They’ll let the rumors fly and allow someone else to be the nominee.

So he need not think about implication on his re-election as there won’t be any.

Great point. He didn’t really seem to want to be Pres anyway. Not that the Pres has all the much power over the economy anyway, but hopefully since he probably doesn’t have anything to lose anyway, he’ll simply push towards the best thing for the country rather than best thing for re-election or party.

Interest rates can actually bring down supply-side inflation. With most things being bought on debt, making that money drastically more expensive will eventually erode demand. With demand falling it brings it better inline with the lower supply levels, easing the inflationary pressure on prices.

The same downside to all of economics still applies though. We can't actually predict what will happen and the larger the changes made the bigger the unintended consequences we will see down the road.

Sure, i suppose inducing a recession does bring prices down, eg., oil dropping is now just a recession in demand. Fair point.

It really sucks when it's phrased so directly like that, but yeah that's basically it. Slowing down inflation means causing a lot of pain along the way, no matter how you go about it

It seems consensus is calling for something like 3.5 to 3.75. But it’s all speculation.

Let's be honest here; most of the cause, is corporate greed.

People will always be greedy. Pretending otherwise is delusional.

Forcing people compete and provide the best / cheapest product with the fewest resources is how wealth is built up for all. Rich and Poor.

Letting companies that are inefficient fail and go out of business is how you manage them.

Government picking winners and losers is how you screw everything up.

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