The Fed’s monetary whiplash

National Review/Steve Hanke and Caleb Hofman/1-31-2023

“Thanks to the Federal Reserve’s monetary mismanagement, Americans are suffering from economic whiplash. Americans enjoyed a post-Covid economic boom. Then, they were hit with high inflation. Now, they are staring down a recession in 2023. How did this happen in just three short years?”

USAGOLD note: Hanke and Hofman argue that the Fed ignores the quantity theory of money and has “no clear sense of direction.” First, it hits the accelerator; then it slams on the brakes. Next stop: Recession.

Money supply [M2]
(Change from a year ago in billions of dollars)

Sources: St. Louis Federal Reserve [FRED], Board of Governors of the Federal Reserve System