The Fed raising interest rates is nothing more than a monetary placebo

The core issue is that inflation this time around does not have much to do with pressures that have historically led to inflation. If Fed quantitative easing policy had anything substantial to do with current inflation we would not be seeing local inflation around the world in almost every single developed country. The pandemic obviously has a huge role in our current predicament. COVID completely threw out the rule book for both monetary or fiscal policy and the truth is our financial institutions are not able to realistically do much to combat the core, fundamental causes of inflation this time around (supply-chain issues). Raising interest rates at this point is only being done to erect a facade that the Fed is actually in control, when in reality they are trying to control an uncontrollable situation using old methods. In other words, it's nothing more than a placebo. Worse, raising interest rates may actually do far more harm than good in our current environment, because aside from the FAANGs and a few other key players the US economy has not even begun to recover from the pandemic and is actually in a far worse place that it was three years ago. I've got a decent background in economics but would love to hear a counterpoint to my thinking.


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