＞ * Because they raised interest rates during a period of cost-push inflation like in 2022, the negative output gap widened. Meanwhile, interest rate hikes could not counteract the geopolitical supply shock itself; instead, they created a situation where "amidst an interest-rate-driven recession, an opportunity arose for commodity futures speculation, which transformed into a conspicuously highly lucrative business," ultimately leading to severe stagflation.
＞ * Thus, the 2022 interest rate hikes by the U.S. FRB achieved two things: ① they induced the inflow of Japanese investment funds into the U.S., bringing about a stronger dollar that served as a partial antidote to inflation, but ② more significantly, they triggered an influx of foreign capital and a concentration of speculative funds into the commodity futures market.
＞ * Consequently, in stark contrast to Japan, which maintained its low-interest rate policy, inflation accelerated in the United States, which remained obsessed with interest rate hikes as a countermeasure against cost-push inflation.
＞ * Against the U.S. FRB, which committed the grave and severe error of applying the New Keynesian Taylor rule to cost-push inflation, Mr. Trump—who repeatedly demanded interest rate cuts—can be highly praised as an eminently rational and uniquely patriotic American president.
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＞ * Because they raised interest rates during a period of cost-push inflation like in 2022, the negative output gap widened. Meanwhile, interest rate hikes could not counteract the geopolitical supply shock itself; instead, they created a situation where "amidst an interest-rate-driven recession, an opportunity arose for commodity futures speculation, which transformed into a conspicuously highly lucrative business," ultimately leading to severe stagflation.
＞ * Thus, the 2022 interest rate hikes by the U.S. FRB achieved two things: ① they induced the inflow of Japanese investment funds into the U.S., bringing about a stronger dollar that served as a partial antidote to inflation, but ② more significantly, they triggered an influx of foreign capital and a concentration of speculative funds into the commodity futures market.
＞ * Consequently, in stark contrast to Japan, which maintained its low-interest rate policy, inflation accelerated in the United States, which remained obsessed with interest rate hikes as a countermeasure against cost-push inflation.
https://gyazo.com/6daac174c5af91139ad1cab4e17e3c95
＞ * Against the U.S. FRB, which committed the grave and severe error of applying the New Keynesian Taylor rule to cost-push inflation, Mr. Trump—who repeatedly demanded interest rate cuts—can be highly praised as an eminently rational and uniquely patriotic American president.