The U.S. economy’s current strong growth is mainly due to a short-term boost from President Trump’s tax cuts. But as any diabetic will tell you, a sugar high does not last. Unless it is accompanied by proper food, in the form of productive investment and growth-friendly reforms - and let's face it, we are not seeing much of either of those - it can end in a very nasty low.
I have concluded that the FOMC members have absolutely no idea what causes inflation. But they know that in the distant past, inflation rose when unemployment was below 4%. So they think they need to raise unemployment above 4% in order to prevent inflation taking off, even though there is no sign of inflation. This is what passes for logic in today’s central banks.
https://www.forbes.com/sites/frances...1#7ec890942dc8
