Breaking the economy as a solution to inflation is bad economics. Inflation is clearly pandemic driven and has been exacerbated by the intentional energy shortages. The pandemic in 1918 caused huge spikes in the inflation rate and reversed itself as supply and demand issues were resolved. A similar pattern is occurring now with an easying of these problems as the globe continues to turn on after shutting down for 2 years. The argument that people having jobs and money to spend will cause further inflation is only true if the greed factor is not addressed. It seems we have had wage growth in the 5.5% range in last year but the cost of goods and services has risen at a much faster pace. Supply and demand account for some of it but greed and wanting to maximize profits after a down period is at play also. As energy costs continue to drop so will the cost of everything else. Energy expenses impact every aspect of our global economy and as the price oil goes up literally everything else does does also. The Ukranuan war is still a major factor in the cost of energy and good supplies. Just raising the Fed rate blindly is like hitting a nail with sledge hammer when a you really just need a regular hammer. How about also not raising rents 30% when your actually expenses have risen by less than half that amount...GREED needs to be called out as a factor here. After the 1918 pandemic ended, the inflation rate that spiked during those years reversed into negative territory. It's time for Fed to sit back and let the natural mechanisms play out and quit trying to crush the economy as means of saving the economy.
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