In her latest opinion piece for the Washington Post, economics writer Heather Long observed about Federal Reserve Chairman Jerome Powell that “Many had predicted he would be Dr. Doom who caused a recession.” Yes, many predicted just that, but not all.
A Fed induced “recession” was never predicted here simply because the economy is global, and credit flows are global. As this column has asserted over and over again, and over many years, there is no way the Fed could “tighten” such that credit would cease its flow toward the most productive people on earth. As has been said here over and over again, but also in two different books published in 2016 and 2022, the Fed’s economic relevance is vastly overstated.
Despite economic activity continuing to increase without regard to the Fed’s expressed desire to put people out of work as a way of fighting what it deemed inflation, monetary types continue to advise the Fed on what to do or not do as though the central bank can control the cost and amount of credit. Ok, but if it could the U.S. economy would too weak to comment on. That’s the always effect of central planning.