The Fed is now being asked to promote social justice… the things that the Fed has had to do other than just stabilizing the money supply and interest rates.
Now the Fed is being asked to take on things like reversing climate change, promoting racial equality in carrying out voracious various social justice demands of the progressive left.
More recently, during the last liquidity crisis during the pandemic last year, the Federal Reserve started buying corporate bonds through ETFs, and they also bought some individual bonds. The point is that the feds, the initial mandate was stable prices and that is maintaining a certain level of inflation. They are making sure inflation doesn’t get out of control, which by the way- they were not able to do in the 70s inflation. They were not completely able to do that in the 70s. There was stagflation which is a situation where not only was inflation high but unemployment was also high. So again, the Fed was that effective.
The Feds mandate seems to be ever-expanding. These sorts of ideas- there are bound to be unintended consequences of everything that the Fed does. This is something that the Fed perhaps does not completely understand. Because. the Fed is supposed to be data-driven and what if the data is wrong… is this beyond their scope and is this something that they should even be getting into?
Granted the economy has changed to a service-producing economy, not a goods-producing economy. When you think of the generation that built the backbone of what the middle class is today- of what a working-class wage -what a working-class living should look like. Now, the Fed came in, and has taken over control and is pushing agendas. They pushed interest rates too, which is then the unintended consequences that push housing costs and pushes all kinds of other things too. One could argue that the Fed is going to inevitably end up being the creator of the next depression. The definition of depression, in that case, will be an event that not even the Fed can alleviate.
It’s like building the dam to keep the Mississippi River back from going the other way. When the next flood actually inundates the big dams, even with all of the corrective measures that have been taken.
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