Does the Fed Even Know What It’s Trying to Do?

[ltlee1]

"We might as well confront it head-on: What the Federal Reserve did this
week doesn’t make any sense.

The Federal Open Market Committee on Wednesday cut the target range for
the Fed funds rate by one-quarter percentage point, to 4.25% to 4.5%,
its third consecutive rate reduction. Because the first, in September,
was a “jumbo” half-percent cut, the central bank’s policy rate now has
fallen a full percentage point from its post-pandemic peak.

This is remarkably dovish. Inflation remains well above the Fed’s 2%
target. Also on Wednesday, central-bank officials conceded in their
quarterly economic projections that inflation this year has been more
stubborn than they had foreseen as recently as September.

Cutting rates despite all this is an even bigger head-scratcher than it
first appears."

https://www.wsj.com/opinion/does-the-fed-even-know-what-its-trying-to-do-inflation-interest-rates-powell-89ba6d69

[ltlee1]

The WSJ writer seemingly did not take the US debt into consideration.

The Fed could not afford to loose the money supply because of inflation
threat next year. At the same time, the US could not afford too large a
stock market correction at this juncture.