Paul Krugman, in an article titled “None Dare Call It Victory,” calls on the Fed to change its inflation target from two to three percent, which would mean that the Fed could go ahead and reverse course on tightening, since at least one official price inflation measure has reached 2.9 percent.

The Federal Reserve System as of the end of July 2023 has accumulated operating losses of $83 billion and, with proper, generally accepted accounting principles applied, its consolidated retained earnings are negative $76 billion, and its total capital negative $40 billion.

Imagine fathers at the little league baseball fence. The first brags, “My son is batting 200!” You should be thinking, “That’s not very good.” The second intones, “Oh yea, well my son is batting 175!” “Hold it,” you’re thinking, “this is going backwards.” And your suspicions are confirmed when the third yells out, even louder, “Here comes my son, batting 150!”