[Steve_American]

The final goal of the Fed. is to reduce inflation.
To achieve this goal, it must achieve the goal of causing a recession.
To achieve this goal, it must achieve the goal of causing increasing unemployment.
To achieve this goal, it must achieve the goal of reducing consumer spending.
To achieve this goal it increases interest rates.

The Fed must know that in world history, the likely result of economic distress is the takeover of the Gov. by fascists or other right-wing extremists.

The Fed must know that in US history, the most likely result of a recession is for the President to be replaced by a member of the other party.

In the current case, this would be a Repud President who will further the IMHO Repud/billionaire plan to impose One Party Rule on the US, effectively ending democracy in the US. The Repuds would also take control of both Houses of Congress. In the Senate they will end the filibuster, because this is their chance to pass many laws to assure that they keep winning forever.

Bill Mitchell wrote: Central bankers deliberately trying to increase poverty is not a sound policy framework– it is not a sound basis for achieving social stability. IMHO, causing social instability that brings to power a fascist Gov. is not a worthy goal.

On Friday (July 29, 2023), the Australian Bureau of Statistics released the latest – Retail Trade, Australia – data, which showed that total retail turnover fell by 0.8 per cent in June 2023 and was up 2.3 per cent on June 2022. In May 2023, it was up 4.1 per cent. So things have slowed. Almost all the components (Household goods, Clothing etc, Department stores, Cafes etc) were down on the month. The ABS noted that despite the massive EOFY sales, “retail turnover fell sharply … as cost-of-living pressures continued to weight on consumer spending”. By way of contrast, in the US the June data from the US Census Bureau – Advance Monthly Sales for Retail and Food Services (released July 18, 2023) – shows up 0.2 per cent in June. Moroever, the latest University of Michigan Survey of Consumer Sentiment results – Improving personal finances, business conditions lift consumer sentiment (released July 28, 2023) – reveal a sharp increase in consumer sentiment in the US. But there was a twist, which is the point of this post. The Survey reported “the material improvement in the economic experiences of consumers relative to the peak of high inflation last year … with the notable exception of lower-income consumers, who anticipate continued challenges from inflation and a potential weakening in labor market prospects.” What we will discuss today is that central bankers are effectively intent on increasing poverty in their societies. And, whichever way one looks at it, relying on such a pernicious policy tool – one that deliberately seeks to increase poverty – is not a sound basis for achieving social stability. And, and as inflation has been falling anyway, despite the hikes, the negative distributional impacts should militate against using such a nasty and inefficient instrument.

https://billmitchell.org/blog/?p=61030

.