Thread by @NorthmanTrader

In 2021 the Fed insisted on printing while inflation was rising vastly above their target.
Now in 2023 the Fed is insisting on continuing raising rates for the most aggressive rate hike cycle into the highest debt construct ever with inflation falling.

Now Neel is trying to explain away the inflation mistake by saying most others got it wrong & their models weren't adequate. Lots of people warned the Fed but they refused to listen to anyone.
Hiding behind "models" is a poor excuse for lack of judgement.

https://twitter.com/neelkashkari/status/1610637229441028097?s=20&t=JZztcyZxe74ZzMpTNsnUhw

It doesn't take an economic genius to figure out that the combination of record fiscal stimulus free funded by the Fed in addition to vast balance sheet expansion resulting in a 25% increase in money supply would be inflationary. The lack of judgement has been appalling.

The combination of stimulus also overwhelmed already stressed supply chains by exacerbating demand. The solution was to step back from excessive money printing during times of record fiscal stimulus. But no, all warnings were ignored.

And why were they ignored? Institutional arrogance. For years central bankers mocked critics of QE as "swashbuckling pirates of capitalism" & such feeling that these continued distortions of the financial system could be consequence free.
They weren't & then they overdid it.

Bad analysis, bad judgement & no accountability.
And who pays for these errors? The population at large.
First with massive inflation, ballooning housing prices & now with a radical increase in cost of carry & then ultimately millions with their jobs.

And now the pretense that this most radical increase in cost of carry into the highest debt construct will also be consequence free with no recession forecasted.

It's either the next big lack of judgement or outright gaslighting.

Either is disqualifying from public trust.

But no worries, all Fed jobs are safe. It's the larger population that gets to pay for all the mistakes this unelected & unaccountable group think committee makes.