The Federal Reserve and monetary policy

by Jehu

It is almost certain the Federal Reserve Bank will raise its policy interest rate next week. The question is why? According to most mainstream simpletons there is no appreciable inflation, real wages are only beginning to rise, growth is robust and unemployment has dropped to levels unseen since the sixties. It is what the simpletons call a “Goldilocks economy” — not running too hot or too cold, a sustainable moderate economic expansion.

Oddly, the Fed seems intent on killing it.

Why increase interest rates, especially when this increase will likely not be felt for — perhaps — eighteen months or so? Is the Fed dead-set on committing suicide? Perhaps eighteen months is the clue: the impact of an interest rate increase in December, 2018 would only just be felt in June, 2020; smack dab in the middle of the presidential election season. It is just possible that the devious bastards at Federal Reserve are trying to trigger a recession just in time for Trump’s re-election.

Trump would be the first president to run for reelection in the middle of a recession since Jimmy Carter — and we all know what happened to that poor fool.

Of course, I have no way of knowing if this reasoning is accurate, but it makes complete sense to me.