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Comment by narrator | Hacker News Reader

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I'm not sure that people see it as moral, so much as boring.

We're not expecting to hear "Exclusive: The cocaine-fuelled prostitution orgy where Bernanke and Greenspan agreed to remove dress shirts from the basket of goods used to measure inflation, replacing them with streaming video services and triggering a rise in the base rate from 5.25% to 5.5%"

Agree - that kind of story is more for the English politicians then the Fed.

They're one of the most powerful, and one of the most scrutinized. Keeping them insulated from political pressure is incredibly important. Otherwise you end up with a monetary policy of "drastically cut rates right before the election to protect the incumbent".

Which is what this clown Glapiński did for PiS in Poland.

And by clown I don't exaggerate. All his off-topic rambling and "bon mots" became a meme ("jak rośnie to spada, jak spada to rośnie", "nie ma co się kopać z koniem")

This really shows how difficult it is to maintain quality of unelected officials who are supposed to be independent and can't even be dismissed.

> can't even be dismissed

Fun fact, this is an unresolved question of law in the U.S. [1].

[1] https://www.bloomberg.com/news/articles/2019-06-18/white-hou...

If they are not beholden to the political incumbent, they will be beholden to a shadow org of conflicting interests. And this shadow org away from public spotlight is the problem

How is it a problem?

most scrutinized and insulated are diametrically opposed concepts.

"Insulated from political pressure" is not diametrically opposed to "scrutinized".

except politic pressure, for better or worse, is the only way we have to scrutinize anything.

otherwise you get a stalinist party. there's no in between. no matter how specialized or elitist and gate keeping your argument is.

> "drastically cut rates right before the election to protect the incumbent".

They're not immune to political pressure. They really should be raising rates again (housing prices going up, stock market at all time highs, inflation still not under control) and aren't for exactly that reason.

I would assume the Fed thinks it's not actually an ideal time to raise rates. Real growth is in the dirt, they have a dual mandate, and the funds rate is an indiscriminate weapon. Given the circumstances the ideal intervention would be fiscal policy aimed at reducing the supply of money in less CoL-sensitive areas but the people in charge of _that_ are uh, somewhat more susceptible to political pressure.

OP said insulated which shouldn't be conflated with immunity.

That said they operate with very little political interference in recent years which is part of why the greenback has such strength. If that were to change the USD/Economy would be in a world of pain. All of a sudden those deficits would be much more crippling as people wouldn't trust the currency.

The shit that would be heaved on both the equity and bond markets if the Fed hiked rates at this point is quite possibly Biblical. I'm not disputing that the pain is better now than later - and it may be the case here as well (I don't know, I'm a trader not an economist). My view is that rate hikes aren't really warranted at this point. Inflation is still high but many of the core measures are finally starting to show signs of improvement. The question at this point is whether the Fed can justify cutting this year or only in '25.

The other side of the coin is that if the Fed hiked now, half the country would be up in arms that the Fed basically assassinated the Biden administration. I think the Fed is not in the wrong of waiting a bit, at least until after the elections. Then if inflation starts coming off, well there's nothing for them to do, and if it doesn't, they can do it without so much fuss from politicians.

Hell, if Trump wins, he might be in the lucky position of claiming that he singlehandedly fixed everything and allowed the Fed to start cutting rates :D

> Then if inflation starts coming off,

This is not an if, it has already been happening for many, many months.

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