What the Fed Got Wrong on Inflation

In the battle against inflation, central banks used to be the lone hero. But missteps in managing the post-pandemic price surge, and rising risks as war, tariffs and climate shocks cause supply shortages, mean that in the future the fight may be more of a team sport.

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[Brandon]

America is currently plagued by the hydra-headed evil duo of inflation and recession. The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..

[thomasbetts]

Inflation is caused by the Federal government spending more than it earns, because they just print more money to make up the difference. To solve inflation, reduce wasteful government spending. Your tax dollars should be spent well, not poorly.

[tv]

Geniuses ? Naaah I can assure you I did not think that 😂

[BetterSubstance]

In many ways, central banks did win the battle by avoiding the stagflation disaster of the 1970s, but in doing so, they might have lost the bigger war of maintaining long-term price stability amidst structural supply shocks. One of the big challenges is that central banks are increasingly facing political pressure to keep interest rates low, even when inflation is high. The independence of central banks is crucial, but if politicians don´t understand their role, it becomes harder for them to take necessary but unpopular actions.

[Harveywhite]

I must’ve missed it… you were going to tell me what the fed got wrong about inflation

[joepphoto]

Powel really did and is still doing a great job amidst all the geopolitical drama and complicated economical situations.

[grimaffiliations]

Inflation response should be targeted at the fiscal level, hiking interest rates is too broad and counterproductive to effectively fight inflation. Central banks can't do anything about rents, supply shocks, monopolies or price gouging yet they actually end up contributing to inflation through more expensive loans and more deficit spending

[olavsantiago]

Greedflation, and shrunkflation have been the theme for the past 4 years. Central banks in raising interest rates cannot affect this effectively. Yeah, people might be working, but if there pay isn't keeping up with inflation, isn't keeping up with the rent/mortgage/utilities/the basics, then the social classes affected the most are feeling like they are in an economic recession.

[mikebostic]

Outdated macro thinking with regards to inflation and interest rates isn't working anymore.

[marc]

Feels like some are using an outdated playbook to address the current landscape. We understand enough to avoid certain catastrophes, but too little to establish a definitive guide on how to plot a reliable course forward.

[reluginbuhl]

So what has happened to weaken central banks' ability to control inflation? Deglobalization? Okay, maybe. You do make a plausible case there, but what else? Climate change? How does that work to reduce their influence? You do NOT explain this or provide any plausible mechanism. Yes a carbon tax might drive up energy costs and therefore also drive up inflation, but why would central banks not be able to respond with higher interest rates? This is not a well thought out video. You do not make a cogent case for the video's title.

[AndreMonthy]

Inflation is in money supply, not prices.

[OmerE.C]

America spent 1$ trillion on interest alone in 2024.
F-35 ll program, the most advanced military program in history, costed 2$ trillion in 20 years, Afghanistan costed us 2$ trillion in 20 years. Now we spend 2$ trillion only in 2 years, for what? Not for another F-35 lll, but just for interest payments

[DS]

When did "feds" get anything right? 😂

[RaceCarLogic]

Not a single thing wrong... Fed writes it... Get it?..

[fturatti]

Its beautiful to see a country with that huge deficit speakeng about controling inflation with monetary policies. It's just plain and simple impossible.
If you put interests too low, it will maintein government afloat for a while and will erode society. If you do the opposite, it will maintain money worthing something, but will erode completly the government.
Without reducing the deficit, the course for America is to become like LATAM.

[IamPngun]

"Central banks might be the captain of the team but, they won't be the only player." Interesting take...some play checkers while others play 4D chess.
7:21 "All priced at". There's a Supermarket chain that recently announced that they would be experimenting with this type of technology in some of their store.

[comfortlee]

How does an Economist say aggregate demand does not affect aggregate supply?

[INVAZOR]

Lots of bs jobs = healthy economy = efficient capitalism?

[sakshambhadoria]

Dilemma that plagues central banks around the globe:- Prioritise growth or save people's savings and hard earned money. Make an economically rationale decision or politically correct choice. Market forces, political disruptions and geopolitical factors make it more complicated while heightening the stakes for all stakeholders.