How is inflation determined by the market? You're not implying that inflation is caused by the market correct?
I also don't believe that fed does an efficient job at "absorbing" inflation as seen currently with record high inflation. They respond way too slow. There is also something to be said about the Fed manipulating the nominal rate so much that is causes price distortions in the economy as seen in 01' and 08'. Many have argued that the record low nominal rates have caused bigger booms and bigger busts as it causes speculation in the markets. Why would you put money in a "savings" account when you can only make .1%? Does lower interest rates in your opinion not spur speculation and greed since you cannot find a good return in any savings account with low nominal rates?
Thewhiterabbit7 t1_j22auol wrote
Reply to comment by UpsideVII in Ask Anything Wednesday - Economics, Political Science, Linguistics, Anthropology by AutoModerator
How is inflation determined by the market? You're not implying that inflation is caused by the market correct?
I also don't believe that fed does an efficient job at "absorbing" inflation as seen currently with record high inflation. They respond way too slow. There is also something to be said about the Fed manipulating the nominal rate so much that is causes price distortions in the economy as seen in 01' and 08'. Many have argued that the record low nominal rates have caused bigger booms and bigger busts as it causes speculation in the markets. Why would you put money in a "savings" account when you can only make .1%? Does lower interest rates in your opinion not spur speculation and greed since you cannot find a good return in any savings account with low nominal rates?