Why Rate Hikes Can’t Fix an Energy Shock or Deficit-Driven Inflation
Rate Hikes Are a Tax on the Private Sector
🚨 Rate hikes are tightening tax in the private sector and will NOT lower the price of refined products, ie OIL.
Supply Shocks Need Non-Monetary Answers
Yes, we need to END THE WAR! Raising rates will not lower the price of a barrel of oil. Supply shocks caused by war cannot be remedied using monetary tools. Raising rates taxes the people. Fiscal spending needs to be reduced.
Relative Prices vs. the General Price Level
An energy shock moves relative prices. Persistent inflation is a general price level problem, and that comes from deficits financed by currency creation.
Rate hikes can’t fix either one. They just tighten the private sector while fiscal stays loose.
Originally posted on X by Rosanna Prestia, MBA (@RosannaInvests): https://x.com/RosannaInvests/status/2110378450880266563
Originally posted on X by Rosanna Prestia, MBA (@RosannaInvests): https://x.com/RosannaInvests/status/2110399497318850902
Originally posted on X by Rosanna Prestia, MBA (@RosannaInvests): https://x.com/RosannaInvests/status/2110431235621441775
