The War Against Inflation Would Nearly Be Over If Not for Trump

Inflation accelerated after a historic supply shock while interest rates remained far too low for far too long, fueling speculative growth and large paper wealth. An October inflation report in late 2021 confirmed a trend that marked the peak of a highly speculative bubble. In March 2022, the Federal Reserve pivoted to the fastest rate hike cycle since the early 1980s, acknowledging it had been late to respond to inflation pressures created by COVID-era supply disruptions. By June 2022, headline inflation reached a cycle peak near 9%, and recession fears emerged even though the economy continued to outperform peers. The rate hikes reduced inflation by tightening financial conditions, drawing lessons from the Volcker era while adapting to different economic circumstances.

"In November 2021, right as Dogecoin reached a $36 billion market cap-one larger than Halliburton's, Estee Lauder's and The Hartford's right now-the Bureau of Labor Statistics returned an October inflation report confirming a trend that would shake the financial world to its core and mark the top of a wildly speculative bubble. In the midst of an easy-money bonanza, the bill for nearly two decades of greed had come due. Inflation driven by a historic supply shock was ripping through an economy that held interest rates far too low for far too long, creating the vast paper wealth of the Silicon Valley ZIRP monster swallowing our society whole today."

"In March 2022, the Federal Reserve pivoted and began the fastest interest rate hike cycle since Fed Chair Paul Volcker crushed the economy with nearly 20% rates in 1981, essentially an admission that they were late to see the inflation unleashed by the myriad ripples of the COVID supply shock. By June 2022, headline inflation hit its cycle peak of 9%, and the whole world began to brace itself for a recession that never came. One of the lessons from the Volcker Shock that finally ended the stagflationary 1970s is that using interest rates to force the economy off the road and into a ditch is a good way to kill inflation too, and Fed Chair Jerome Powell and his board of governors tried to draw from the lessons from the 1970s, albeit with a more delicate touch."

"And it was working. The Fed's fast, but not too fast, rate hike schedule caught up to inflation and tamped it down, all while the U.S. economy outperformed all of its peers post-2020. In June 2022, core CPI, the inflation measure the Fed pays attention to in order to set pol"

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