Thread

Fed hikes rates as inflation worries push up bond yields

184 points · 250 comments · wslh

im_down_w_otp · 1789589401 · focus · HN ↗
It bugs me that the Fed has no mechanism to really deal with supply-shock driven inflation. Prices are shooting up, but not strongly correlated to money supply at the moment. They’re shooting up because there are a dozen or more entirely capricious and totally self-inflicted supply-shocks due to bizzaro tariff “policy”, disastrous military adventurism, and general erosion of the USD the prime vessel for international trade.
The Fed tightening the money supply isn’t going to materially bring prices down, because the money supply isn’t driving the price increases.
1. throwawaysleep · 1789589641 · focus · HN ↗
  Isn't the goal then demand destruction?
  1. burnt-resistor · 1789594700 · focus · HN ↗
    The net effect is demand destruction. The US shouldn't be exporting diesel when it lacks sufficient refining capacity to make up for all of the capacity destroyed or unavailable from the US war of choice with Iran. And as the price of US domestic diesel goes to $6+, oil demand is going down both because there's insufficient refining capacity and there's a general slow down in the economy from the added inflation baked-in by higher oil prices and higher diesel prices.

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