Why interest rates aren’t really the right tool to control inflation

MaketWatch Opinion/Rex Nutting/1-15-2022

graphci image of a sheep posing as a lion before a computer screen

“It may be heresy to those who think the Fed is all-powerful, but the honest answer is that raising interest rates wouldn’t put out the fire. Short of throwing millions of people out of work in a recession, higher rates wouldn’t bring supply and demand back into balance, a necessary condition for price stability.”

USAGOLD note: If Rex Nutting is right, what happens if and when financial markets discover that the Fed is confronting a disease it cannot magically cure?

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