Fed cut rates by 25 bps and immediately ended QT program. This is indeed the bankruptcy of post-2008 policies.
After 2008, Fed slashed rates to 0 and quadrupled 200 years of central bank money. It was supposed to normalize when the crisis was over
Normalization meant to lift rates up to 4-5% and burn at least %50-60% of the money Fed printed after 2008
Now the Fed and its major counterparts’ main objective is to keep stocks and other markets - or the largest casino on the world - going.
Bc by going off gold standard in 1971, they printed unlimited money & destroyed pricing mechanism that real economy was devastated
After the 2008 Crisis, Fed kept telling us that economy was growing thanks to the history’s largest money printing experiment.
Growth is calculated by adding up monetary value of all goods and services in a year and comparing it with the previous year.
But you need to subtract inflation. You cant reach right growth numbers unless you remove impact of inflation or the lost value in money.
So what happens if the inflation was not calculated right for decades?! Yes your growth data would be wrong, too!
During 70’s & 80’s, inflation was high in the US. To curb inflation, they hiked rates and... changed inflation calculation method!
For all these years US inflation and of course growth were calculated according to this new method. What would growth look like with the old method?
There is an institution calculating inflation with the old method: Shadow Stats. This institution also calculates growth according to old inflation.
They try to hide a 19 years depression with calculation tricks and money printing. Last Fed decision represents failure of this game.