by Paul Mueller
The American Institute for Economic Research
The Federal Reserve system in the United States is the largest financial institution in the world with more than $7 trillion in assets. It “manages” the most important currency in the world. Its decisions can dramatically affect the course of the largest economy in the world.
Wouldn’t it be nice if its officials knew what they were doing?
Yet ever since the 2008 financial crisis, the Federal Reserve has more or less been whistling in the dark. After that crisis, it dramatically changed its approach to monetary policy and targeting interest rates. For a decade it struggled with inflation being “too low.” Then, in 2021 and 2022, it had to deal with the forest fire of inflation — a fire still burning in some sectors of the economy.