I'm certainly no Fed apologist, but this is a bit unfair. Certainly in mid 2022 around the time of the first 75bp hike, inflation expectations did not look anchored, wages were rising rapidly, and at the bare minimum the idea of a wage price spiral could not have been allocated less than say 10-25% chance. That's enough to demand a policy response, and if it turns out to have missed the mark it's not fair to judge from a year later with the benefit of hindsight.
Very nice piece Chris. I like the quote on Hayek and in general agree on the state of macroeconomics. One perspective that I offer in my blog (https://gianlucabenigno.substack.com/p/has-the-fed-monetary-policy-been) is that I am not so sure that Central Banks have really tightened according to their mainstream perspective (at least the Fed)!
I'm certainly no Fed apologist, but this is a bit unfair. Certainly in mid 2022 around the time of the first 75bp hike, inflation expectations did not look anchored, wages were rising rapidly, and at the bare minimum the idea of a wage price spiral could not have been allocated less than say 10-25% chance. That's enough to demand a policy response, and if it turns out to have missed the mark it's not fair to judge from a year later with the benefit of hindsight.
Otherwise, solid summary.
Very nice piece Chris. I like the quote on Hayek and in general agree on the state of macroeconomics. One perspective that I offer in my blog (https://gianlucabenigno.substack.com/p/has-the-fed-monetary-policy-been) is that I am not so sure that Central Banks have really tightened according to their mainstream perspective (at least the Fed)!