Alex Pollock explains that something is wrong with the Fed, big time. And it really shows in 2022. Pollock writes::

The powerful and prestigious Federal Reserve is having a tough year in 2022 in at least three ways:

• It has failed with inflation forecasting and performance;
• It has giant mark-to-market losses in its own investments and looming operating losses;
• It is under political pressure to do things it should not be doing and that should not be done at all.

Forecasting Inflation

A famous aphorism says, “You cannot hit a target you cannot see,” which expresses a more general truth. We cannot hit what we cannot see, because seeing allows us to discern things of interest from everything else; it focuses on a signal, on a target, rather than the noise around it.

This is an actual news headline from the Associated Press, published over the weekend:

Fed tackles inflation with its most diverse leadership ever

People across the globe are demanding that governments repudiate the legacies of colonialism. Some think that true independence requires liberation from colonial institutions, while for many, preserving colonial laws is indicative of mental enslavement. Such arguments are emotionally appealing but intellectually unsound.

The recent hefty depreciation of the yen to a twenty-four-year low against the dollar has raised eyebrows due to the yen’s traditional safe haven role in times of turmoil, such as the war in Ukraine. The yen’s decline had already started when major central banks signaled a tightening of monetary policy to fight inflation while the Bank of Japan (BoJ) doubled down on its loose monetary policy and zero target for ten-year bond yields.

Speaking at Jackson Hole, Wyoming, on August 26, 2022, the chair of the Federal Reserve, Jerome Powell, said the Fed must continue to raise interest rates—and keep them elevated for a while—to bring the fastest inflation in decades back under control. Powell said that a tighter interest rate stance is likely to come at a cost to workers and overall growth. However, he holds that not acting would allow price increases to become a more permanent feature of the economy and prove even more painful down the road.

The recently completed royal tour of the Caribbean has provoked debates about Britain’s participation in the transatlantic slave trade. Animated by propaganda, such discussions obscure the complexity of the slave trade. Political hustlers are characterizing the slave trade in racial terms to justify divisive ideologies when the issue is more nuanced. The transatlantic slave trade must be situated within the broader discourse of exploitation.