Is The Fed Non-partisan?

Originally the substance of today’s posting was intended to be buried in yesterday’s article. After some reflection, I felt it was too important for that and deserved its own “showcase”. Hence a short but very, very important piece.

Last week the Fed yet again raised interest rates. In my opinion, and that of many others, the rate increase was unnecessary and I’ll go so far as to say dangerous. The Fed has two goals: keep inflation in check and help provide the conditions for full employment.

For years the Fed’s inflation target has been 2%. The latest leading indicators show inflation at 2.1%. Not to abuse a cliché, but good enough for government work.

Friday the January jobs report came out and the unemployment rate was at 3.4%. Economists generally agree on 5% unemployment as full employment in the American labor force. Any way you slice it there is no problem there. Unless your aim is to exploit your workers that is.

So why the rate increase with the “indication” of more to come?

The current fed funds rate is 4.75% remember it was near zero under Donald Trump. Why this persistent (and in my opinion unnecessary) effort to cool the economy down?

Who benefits from a weaker economy and higher unemployment? Not Joe Lunchbucket.

What is the problem with some equality in the bargaining position of workers in the job market?

The House Republicans (and most of their Senate counterparts) are doing everything they can to make Biden look bad. Voters very often vote their pocketbooks.

I’m all for a non-partisan Fed! I’m just not sure we currently have one.

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