My employer’s algorithm for 2020-2024 was, I kid you not, “published rate - 2%” for our cost of living raises. I’m willing to gamble they will not lower my wage during a recession, and we’re a small, profitable, fiscally conservative firm.<p>Why not roll the die?
I'm pretty sure it's actually a hatred of a decrease in real purchasing power, and... why would anyone not hate that?<p>Personally I'd rather not get a raise at 2% inflation than a 3% raise at 6% inflation, and I don't think that's unreasonably irrational?
Note that this statement about Americans’ preferences is not based on any measurement of Americans’ preferences, but is just the opinion of the president of a federal bank.
They will have to cut rates, because they can’t keep paying the high interest on the government’s debt[0][1]. There’s no political will to raise taxes and cut government spending (one or the other may happen, but not both)[2]. Keeping rates high on the government’s debt may increase inflation[3].<p>It’s also part of the Fed’s mandate to maintain employment[4].<p>Between these factors, it’s more likely rates will be cut.<p>EDIT: Sources<p>0. <a href="https://fred.stlouisfed.org/series/GFDEGDQ188S" rel="nofollow">https://fred.stlouisfed.org/series/GFDEGDQ188S</a><p>1. <a href="https://www.cbo.gov/publication/59014" rel="nofollow">https://www.cbo.gov/publication/59014</a><p>2. This is part of the conjecture that MMT makes, but never pans out in real life. See <a href="http://www.thomaspalley.com/docs/articles/macro_theory/mmt_response_to_wray.pdf" rel="nofollow">http://www.thomaspalley.com/docs/articles/macro_theory/mmt_r...</a><p>3. <a href="https://www.lynalden.com/inflation-vs-interest-rates/" rel="nofollow">https://www.lynalden.com/inflation-vs-interest-rates/</a><p>4. <a href="https://www.investopedia.com/articles/investing/100715/breaking-down-federal-reserves-dual-mandate.asp" rel="nofollow">https://www.investopedia.com/articles/investing/100715/break...</a>
I think the causes are misunderstood, people understand inflation less than the general concept behind a recession? So naturally inflation seems bad because it’s less understood and it makes prices of nearly everything go up.
Well, Kashkari should know better, given he's the president of the Minneapolis Fed. The Fed has a dual mandate (low inflation and low unemployment). Recession avoidance is not part of that mandate.
Inflation feels disconnected from daily choices and even regulation to such a high degree t feels engineered to do so. Of course the commoners with no say in its implementation would reject it.