What If The Fed Never Gets To 2%???

The average inflation rate over time has been the biggest media propaganda campaign that has literally convinced 99.9% of the people.
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Mohamed El-Erian on AI Rally, Inflation, Central Bank Mistakes www.bloomberg....
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[@hailandfire1822]

Mrs. Powell: Honey, why do you keep putting the milk carton on top of the grandfather clock? It belongs in the fridge. Jerome Powell: 2% over time, my dear. _2% over time._

[@rosierose6008]

❤your analogy😂

[@JackPinkhunter]

I don't get it

[@playlistjohnnybitter]

Dude that would make a great cartoon

[@andrewsnyder9262]

Awesome

[@AnAntidisestablishmentarianist]

🤣🤣🤣🤣

[@craptacular8282]

I would say that the inflation last year more than offset the last 10 years and they should be aiming below 2% now.

[@calvinhancock7844]

Exactly !

[@DearSX]

If they are getting this high inflation with high-ish rates, how far up do they have to go to get it down below 2%?

[@HomesAndHustles]

That target 🎯 analogy was helpful, thank you!

[@llgoulet74]

V helpful. Easy way for me to explain this to people.

[@ILLUMINATOR49]

Your assessment is correct and you should push this reality on other channels as a guest. Everyone wins and you get more viewers

[@UneducatedEconomist]

Just did a collaboration this morning

[@sandman1347]

Really good insights in this video.

[@cbr8206]

UE, the last two minutes of this video is gold (IMO), and I don't hear you say it enough. IMO, the FED's comments/focus on inflation is just a smoke screen. The real focus for the FED was and is monetary policy, as in being able to have one. As you wonderfully point out, the FED needed it's ammunition back in the form of raising the overnight FED funds rate. Allowing inflation to run hot and to the edge of out of control gave the FED the much needed opportunity to raise the overnight FED funds rate to a level where it can now comfortably execute a monetary policy. Now that the goal has been achieved, all discussion about inflation rates, etc. are just BS. The FED doesn't care about inflation at this point. What is being done now is talking about inflation in a manner that will, over time, support the FED in keeping the overnight FED funds rate in and around where it is so it maintains the ammunition it needs to execute monetary policy. Nothing more, nothing less. If you agree, which I think you do, this is what you should be discussing more.

[@user-rg9xd9mu5r]

So what you are saying is that releasing COVID and blaming it on Chinese peasants was part of monetary policy.

[@cbr8206]

@@user-rg9xd9mu5r well, I am not saying that, but it does seem clear that shutting down the world's economy, which created a massive supply side inflationary spike, gave the FED the opportunity it so desperately needed. Whether the opportunity simply happenstance or by creation could be up for debate, but I don't see how that would change our evaluation of the topics UE is discussing.

[@frikkiethirion8053]

​@@user-rg9xd9mu5r It was the playbook to steal $6 trillion

[@llgoulet74]

What do you mean by the Fed Doesn’t care about inflation at this point? Because they have already achieved their goal?

[@cbr8206]

@@llgoulet74 correct. I think the FED's sole focus is maintaining its ammo.

[@Photoguy15]

Any idea on the “over time”? If inflation was well under 2% basically for a decade, does that mean inflation higher than 2% for a decade? Why. Or have hyperinflation for a year to average 2%over say 12 years instead of decades of under and above?

[@llgoulet74]

But why 2%. What does that do for them?

[@tldw8355]

Do i understand it right? Powell knows he cant hit the 2% target. He is now thinking 3-4% is the new 2% but he cannot say that part because everyone would re-adjust to it and spend. Instead he say they aim to get it down to 2% over time and the time period is unknown so it could mean last 20 years or 50 years. But just looking back last 22 years avg inflation is 2.5% so he will have to run below 2% for many years to achieve that goal. But Powell knows already that so he is just basically lying to get the people to be calm? Please let me know what i'm missing and thank you very much for a great channel! :)

[@cbr8206]

I think you are missing the point, kind of. You and everyone else is focused on inflation, what it means, and how to control it. I don't think the FED cares about inflation, at least not anymore. All the FED cares about is having an adequate amount of ammunition so it can execute on a monetary policy. Now that it has ammo in the form of the overnight FED funds rate, it needs to find a way to keep people believing that it is going to, eventually, lower the overnight funds rate back to zero, which isn't going to happen unless there is another GFC or GD. So...the FED is focusing on a nebulous definition of inflammation and inflation rates so it can keep people focused on something other than what the FED is actually doing, which is NOTHING. It doesn't want to lower the overnight rate because to do so will erode it's ability to execute on a monetary policy. As UE would say, "Am I making any sense?"

[@BroJo333X]

good question

[@PoKeDoN1992]

​@@cbr8206they have to though to some degree if they want to maintain stability of the banks which is the reason the fed exists

[@bradenwarrender8474]

Love the content in this…only question I have is what you’re saying directly contradicts your belief that inflation has been because of supply shortages. In this video your pretty much saying the FED has been creating this high inflation intentionally to make up for years of under inflation. BTW, I agree 100% with you on this, but not so much that the high inflation was because of supply shortages. Love the discussions!!

[@UneducatedEconomist]

The fed didn't cause inflation. They took advantage of it. Supply and demand imbalances caused inflation when the credible threat of inflation is hammered into the economy.

[@CarMaintenanceGuy]

I want a depression to hit us SOOOOOOOOOOO HARD that I can rent and buy a home for the prices I was paying in 1995. How do we get this to happen? I want to buy a house for $80-100k or rent an apartment for $600/mo for a 1 bedroom like I did before. Tell me what we have to do in order for this to happen. I used to earn $46k/yr in 1995. So I could live JUST FINE on that same income again if all the prices come back down.

[@thomascrown]

I would suggest structuring your life for how things are rather than wishing for things to be different for you to get ahead

[@CarlitoswayDR]

How you would buy it without a job in a depression? Lol

[@CarMaintenanceGuy]

@@CarlitoswayDR Being in MLM's with a huge downline. Made over $1M so far.

[@CarMaintenanceGuy]

@@thomascrown Give examples of this. This is too general.

[@Nun195]

There is a housing shortage, combined with a decade long under production of housing , higher interest rates, a depression most likely won’t being down housing costs , could even make them go up since construction spending would fall.

[@andreasasatya9188]

There was a time when the 2% was the ceiling. If I remember correctly.

[@alexandervaldes7200]

Agree 100%!!! Thank you for saying this!! I had been tracking this too and I said it appears Main Stream Media is talking and normaliing higher prices aka higher inflation. I'll be ok as I've been planning for it but so many have no idea and they'll get crushed or not living as good as they can due to higher for longer inflation. Great video bro!!!

[@richardbrown923]

You have been correct for awhile, know we just gotta figure how to use the info

[@kathrynj.hernandez8425]

Boy, howdy! 🎯Nailed it UE, with that hypothetical illustration. I get it now while even the hi-IQ market & financial analysts are still hammering on 2 percent. They don't even know what they don't know nor care enough to explain their rationale! I feel...special!

[@brandonshambach9357]

Great channel. Thank you.

[@ivanryz]

Long term, technical analysis agrees with ya. Excellent point of view. Inflation just doesn't go away. It keeps spiking and requires more corrective action over long term.

[@darwingortiz7013]

Once i asked my middle school daughter How are your grades? She responded: do not worry, i am above average. That's how you hide and manipulate reality and keep mediocrity unchecked.

[@CarlitoswayDR]

Here’s something you need to factor in here. With 5.25-5.5 Fed funds rate, is just a matter of time for the house of cards to fall apart. Too many things that can’t resist high interest rates, commercial real estate, banks retailers, cars, homes, which is more than half of the economy. I will tell you the end game here soon: hyper unemployment, deflation, bankruptcy, credit crunch, stores closures, recession, reset and restart over again.

[@colindilworth4223]

Yeah, we kind of need that to get rid of all the fake in our economy and reign in the spending of the federal government. Men left standing will be those who actually provide value without fake money.

[@helviov]

I completely understand your point. The question I have is: why 2%?

[@car_ventures]

2% was worked out a long while ago as a steady rate of econmicc growth, as it represents a balance between growth and stagnation. It encourages innovation because there's a 2% decay in the system, so keeps the population active by keeping the decay of value at bay. It's slow enough that year on year it's not overly noticeable, but after a couple of years or more it's noticeable so encourages action. If the % is too high then too much value if lost too soon and therefore stability is lost, things lose their value far too quickly and it can fall into hyperinflation. An economy needs some movement but it needs to be slow and steady, which is what the 2% average represents.

[@helviov]

@@car_ventures Thank you. I’ve heard this argument before, but the number sounds too arbitrary. And I don’t buy the argument either, there is no virtue in increasing the money supply.

[@jacobjohnson2714]

Thanks!

[@UneducatedEconomist]

Thank you 🤙

[@AdvancedIdeasForLife]

Your sound quality is excellent! HOW Do you get that Great Sound Quality with a Camera Phone and NO Lapel Mike? Thanks for your Response :)

[@UneducatedEconomist]

The secret is the car

[@AdvancedIdeasForLife]

@@UneducatedEconomist OK … But what do you use for a MICROPHONE? Please be specific … Thanks! :)

[@TexasDharma]

So what does all this mean for the avg citizen in 2024? Are they planning to keep rates high or low this year?

[@buscandolaverdad101]

That's what they do, lie about monetary policy. Just buy Bitcoin and forget about liars

[@buscandolaverdad101]

@@gyrate98 🤣

[@buscandolaverdad101]

@@gyrate98 I like turtles 🐢

[@lilblackduc7312]

The KZbin ads break my concentration several times in the first few minutes. I can't learn anything that way. I split...

[@tylers.9203]

Higher for longer lol Thanks Simon

[@rathelmmc3194]

I think you're ignoring the other part of your statement which is "people's expectations." Right now people's expectations are that inflation is higher than it actually is. We need deflation for people to believe the Fed is hitting a 2% target. The last 4 years we've had in excess of something like 15% inflation over the 2% target. That would eat up a lot of previous slightly lower years. EDIT: Fed Fund Rate could be negative if the Fed wanted it. Also you seem to be ignoring that QE is also monetary policy that the Fed has been using. We didn't need 50 to 100% food inflation in the last 4 years so the Fed could feel useful.

[@davidzoller9617]

Well, when they say, there is no formula to calculate it, then any further analysis of the 2% target is obsolete.

[@UneducatedEconomist]

Because a 2% doesn't exist

[@DZB331]

If they are going above 2% why would they not lower rates to get more inflation right now ? Thats what I don’t understand

[@Putzing]

Thanks Simon

[@vawt1953]

They can not get to 2% under current policies from the resident in the WH we would actually have to have negative inflation for at least 12 months just to make a dent

[@karl28560]

In school; any time i didnt follow a specific mathematical formula to get 2% .... I FAILED THE MATH QUESTION!

[@BroJo333X]

Good insight. Question now is. If you have some unique look at this, should we not be able to make some handsome profits? That`s the only thing missing in this vid, is the HOW.

[@UneducatedEconomist]

Internalize the information and make the most appropriate choices.

[@spicemasterii6775]

What's the definition of inflation here? Increase in credit? Or core price increase of commodities?

[@Anthony-bo8ry]

Wow this is so interesting

[@calvinhancock7844]

Simon, from 2014 -2023 inflation avg was 2.74%, from 2020- 2023 avg was 4.48% if what your saying is right the the Fed will not lower intrest rates and we even see a rate rise ? This would explain why billionaires are cashing out maybe they know hikes are coming ?

[@UneducatedEconomist]

Since there is no mathematical formula, I'm not sure what you think I'm saying?

[@calvinhancock7844]

They may say there's no formula but I can't believe thier just shooting from the hip. They're aiming at something.

[@yocobicus]

So this might be a red herring. But something still feels off when I look at the economy from 2010 to 2013. Right around 2012 there is something weird about prices and nobody was anything about inflation in those times.

[@gcoffey223]

Simon!! Got the popcorn... and push play

[@combatkool-aid9495]

I feel like the fed should have been fired in like 2008. The runaway inflation ever since switching to fiat backed currency has been a detriment to the citizens lives rather than a useful tool. Like literally my company is doing job bids in materials now since inflation has hit such a whacky way. Like i still work for money to do rig buildouts since i can order in from overseas with it but i think the future of domestic production for domestic sale will return to bartering.

[@BrandonTalksFitness]

I’m not sure what your point is. Yes, they are aiming for a 2% average over time. We know this. This isn’t new information. So what?

[@mitchell.9632]

Despite it name the Federal Reserve is not accountable to for the most part voter (there area a few laws) as the Fed is not part of government. Also there are half the amount of companies / banks doing the banking (and very similar for credit unions) - nationwide numbers meanwhile in that time the population of the U.S. has increased.

[@craigcolbourn8351]

What’s the #1 U.S. export??? Answer: OIL What does a weaker dollar do for U.S. oil exporters? It helps them sell more oil abroad

[@richardjhonson6272]

2% inflation rate over time relative to what common denominator?

[@MaxPower-11]

This information is kind of misleading. Yes, they are planning a long term 2% target average which means that at times they may allow inflation to run above 2% to “compensate” for periods that inflation may be running under 2%. However, it’s been a very long time since inflation has been in the “under” state (and honestly, even in the 2010s when they were “under”, they were only under by like maybe 0.3% to 0.5%). Therefore, they *do need* to get to 2% and stay there because at this time they don’t have any under 2% periods to offset/average out the waay over 2% periods we’ve had in recent years.

[@UneducatedEconomist]

Take a look at the previous decade. Persistently under the 2% with a few times it was above. Inflation was too low. Read the speech "monetary policy for a low neutral interest rate world" it explains it all

[@MaxPower-11]

@@UneducatedEconomist most of the time it was a tiny bit below and a couple years where it was above and one year it was below with one year with one year at zero but all in all usually just a bit under the target. All this was (and still is, though to a lesser degree) more than offset by the huge run up in the past few years. As such, there is not enough inflation “deficit” in the pipeline for the Fed to allow inflation to run above the 2% target for any meaningful amount of time at this point if they want to hit a long term 2% average. So while “inflation targeting” as a concept does exist as a theory, in practice, *at this point* the Fed doesn’t have the runway implement it to the “positive” side (i.e., allow inflation to be loose on the hot end). At least not until it can start “banking” some duration of time of ‘undershooting’ inflation figures and we are not anywhere close to that yet.

[@grompark]

“They” want us hypnotized with their propaganda and it works..thank for another banger UE!! Keep up the great work

[@Rokisempai]

So cuts or no cuts?

[@colindilworth4223]

No cuts

[@mishandr6717]

Please remember to give lumber reports!

[@UneducatedEconomist]

I dont have anything to report. Lumber is not doing much

[@Red-Bird-October]

What happens if the Fed never gets to 2% inflation? They say that the new target is a different number.

[@hentaicrypto]

They will keep saying they are targeting 2%😂

[@PinchinPennies.]

Man the pandemic sure hit at a convenient time for the FED hmmm.....

[@MrDonny27]

People tired about hearing about fed reserve and they 2 percent average over time.

[@kennethoneill4176]

The federal reserve doesn’t care about 2 percent inflation rate over time. They care about giving no credibility to anyone attempting to absolutely predict what whe federal reserve will do next meeting. If the very rich want the fed to drop interest rates. They need to allow the companies they run to cut prices and take less profit to drive inflation rates down.

[@MMMiTCHH]

and dont have kids

[@josecastle4731]

Are you saying they will go into deflation to make up for lost time

[@emiliaganchorre]

I'm young (just turned 20), but isn't this better? Letting the economy be more lose so risk of moral hazard goes down. Instead of forcing action you just let it happen as it is. No hard unexpected interest rate changes, stimulus, change overnight lending rates, etc. If it needs to be done it will naturally happen. I don't see the problem with making the people perceive 2%. Perception is reality. Like what percentage of people actually know where money comes from or what federal notes are? FOMO and mania are easier to push. If I'm wrong about anything that I said I need to know.

[@danielj3010]

UE KNOWS HIS SHEET!!

[@standard74521]

Ty

[@BobLafarg1]

How much bitcoin does the federal govt have on hand?

[@brodyalden]

Thank you very much for everything you do EU

[@byronmcdougald6569]

So here's my question to you Educated.... Do you believe the Fed is going to shock the market by raising rates this year?

[@benjaminmale601]

The fed is fucked, the end

[@cbr8206]

Wrong. The FED is maximizing an opportunity it desperately needed...to increase the overnight funds rate. The FED needs room to execute a monetary policy and only has room if the overnight funds rate is well into the positive range, like it is now. The FED isn't EFFED. It is much much in control.

[@brodyalden]

@@cbr8206 ^

[@benjaminmale601]

@@cbr8206 you need to study the history of currencies little one. Its never different.

[@cbr8206]

@@benjaminmale601 yeah, I'll get right on that. In the meantime, are you able to cobble together some type of substantive response to my post, or is that beyond your capabilities???? 🤷

[@ayoutubewatcher7009]

propositional / integral / derivative

[@PD55_]

But Powell does not ever try to clarify the media's miscommunication. So if you allow the public to continue believing a slight falsehood, are you not also lying?

[@UneducatedEconomist]

Gaslighting

[@thomasbradley2225]

A quixotic goal that will remain elusive. The massive stimulus pumped into the economy adds considerable debt compared percentage-wise to GDP; while petroleum assets are deliberately shoved aside by the democrat incumbency. A nominal trey is a workable compromise within FOMC board mindset but inflation gauged outside core measure is much higher.

[@TimezUp23]

The Fed can blow through the moon and destroy Uranus

[@recoveringlife7879]

Never will. The cats out of the bag

[@noydbwia]

The sad thing is, most people are obtuse enough to believe whatever the Media peddles.... The innate human curiosity level has been pretty much subjugated in most people today, therefore, they are more than willing to accept at face value whatever they're being fed by the media. OTOH, none of your videos are "too long"...

[@sterling2p]

Award for the most times 2% is mentioned.

[@BarryKing-mc7vq]

😂 pure unadulterated dub squeeze

[@sagemunafo]

Alright UE!

[@terryallan1110]

They never got anything right

[@bm2g]

you talk asif they have complete control over the interest rate they want at the time, they have lost control brother, fiat currencies are debt based, the supply has to continual increased, the dollar will be gone within 15 years in its current form.

[@UneducatedEconomist]

I said that same thing 15 years ago.

[@benjaminmale601]

Never going to happen 15 years ago, not old enough, but it's getting there now, study fiat currencies, your American, you obviously think this cannot happen, but it can & will.​@@UneducatedEconomist

[@user-rg9xd9mu5r]

Never underestimate how cucked the average American is. The Dollar is eternal.

[@user-rg9xd9mu5r]

​@@benjaminmale601Doomer cope. "15 more years! For real this time!"

[@thomascrown]

The crash bros have sold you a bridge in Brooklyn

[@disheseveryday3207]

❤

[@andretokayuk8100]

How do you say "f the fed" in the language of the tax slaves?)/*

[@SpodyOdy]

😎👍

[@mattbittner775]

🍮

[@zgreg427]

Selling FUD for personal gain

[@UneducatedEconomist]

Trolling because there really is nothing better to do with life