The Fed and the Indy 500

Honey, I think Junior found a box of matches. No worry. He doesn't know how to use matches. 

Honey, I think Junior took out a match from the box of matches.  No worry. He doesn't know how to use matches. 

Honey, I think Junior is striking a match.  No worry. He doesn't know how to use matches. 

Honey. I think the match is lit. No worry. He doesn't know how to use matches. 

Honey, Junior's room is on fire. Oops. 

Reminds me of the current discussion over monetary policy. Monetary policy aimed at expanding the economy remains a discussion item despite the fact the we have expanding economic growth and rapidly rising interest rates and inflation. It is time to blow out the match. 

The title of an article in the Wall Street Journal is Fed’s Inflation Fight Has Some Economists Fearing an Unnecessarily Deep Downturn. Interesting choice of words -- Fight, Unnecessarily, Deep, Downturn. To me those are fighting words. 

It's not enough that the Fed's errant policy might induce a slowdown in the economy -- folks are worrying that the downturn is deep and unnecessary. Why does the Fed risk something that is unnecessary? Why risk a deep downturn? What is wrong with those people? Aren't they satisfied with a good old slowdown? Won't that be enough to quell this inflation fire they started? 

I guess not. As in the inflammatory remarks above, you don't wait to call the fire department until the flames are all-consuming and there is little hope of saving the building. Instead, you might allow for a little friction but stop before you start a fire -- even a little fire. But not our Fed? 

They saw the fire starting but found every excuse under the sun to ignore all the signs. How high does the inflation rate have to rise before someone at the Fed slides down the fire pole?  Has the rise in the inflation rate not equaled or exceeded past increases in inflation? 

That's where we are. The Fed sat on its hands while the blaze started and now that it is roaring -- they sit on their hands again because they fear that they have backed themselves into an inflationary corner. 

As in the first lines of this piece above. Don't let Junior have the matches. Nope. Don't let him touch them. 

The Fed? Teach the Fed to act like a race car driver. When the car veers a little too far left, then make a correction rightward. Too far right, then correct to the left. Keep on top of the movements. Lots of little corrections keeps you on course. Waiting too long to correct puts you in the stands. 

What is wrong with our current crop of Fed officials that they can't understand these simple facts? Maybe the facts don't fit their ideology? Maybe to them rising inflation is more fun than falling?