“Maintain Stable Prices” – Who Are The Central Banks Kidding?

One of the Fed’s three main objectives is to maintain stable prices. But they have never achieved that at least not since 1971. Again, the Fed did a volte face because they have a total inability to read the economy. The clueless Fed overslept and realised a few years too late that the US economy was overheating. So at the time when the economy was turning down, the Fed started to increase rates and implement QT (quantitative tightening). But now they are panicking and reversing policy again. I discussed the incompetence of the Fed last week. Below is the Fed’s Incompetence Chart. Some people would use a sophisticated description like an inverted yield curve when the rate goes negative. But that doesn’t tell the real story. The chart shows the 10 year US Treasury minus the Fed Funds rate. This spread has just gone negative which means that 10 year rates are lower than short term rates. This is interpreted as a high probability that a recession is imminent. Looking at...

from GoldBroker.com https://www.goldbroker.com/news/maintain-stable-prices-who-are-the-central-banks-kidding-1516