The Fed’s duel mandate is simple. Control inflation, and promote full employment.
Ex. A
I present the consumer price index (otherwise known as inflation)
Can you find the inflation?
Don’t look too hard, after years of printing trillions of dollars we simply don’t have much inflation to show. How is this possible? The answer, I believe, is innovation. I will elaborate on this theory in future posts. Basically innovation = efficiency = deflation.
Ex B.
I present the labor force participation rate.
Why fix what isn’t broken?
Looking at these two data points that directly correlate to the Fed’s duel mandate, and ask yourself? Why on earth would you consider changing the course?
Innovation counteracts natural inflation. If we continue to innovate, I believe we can not only accommodate further stimulus, but most certainly a low interest rate environment.
On a side note, I am sick of fed governors talking to the media. I would impose a strict media black out on anyone other than the chairman.
Janet Yellen, get your house in order.
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Oh look, Personal Consumption Expenditures, the alleged preferred measure of inflation for the Fed, came in at a whopping 0.1% increase from September, and 0.2% climb from a year earlier. And Core PCE was flat from last month. To make the inflation argument even moar compelling (extra sarcasm), personal spending increased a gigantic 0.1% from last month and the savings rate is the highest its been since December 2012. Add this together with the GDP revision yesterday indicating that inventories were double what they originally thought, and we’re well on our way to reach the Fed’s 2% inflation target…What a clown show they run there.