Subject: Re: Krugman on the Fed
...quite soon long-term interest rates will go up, not down, because forward-looking investors will realize that politicized monetary policy is feeding inflation...

Speaking as an observer of the financial world from outside the US, that damage is likely already done, even if it hasn't yet showed up in asset prices. No sensible person would continue to assume that the Fed will be independently run by a sensible person in future. I now assume short term political considerations will be a bigger factor than prudent macroeconomics. True, the logical expectation is unwarranted low interest rates and the predictable inflationary acceleration, but it may also involve the Fed finding regulatory ways to divert capital towards the friendly. Crypto bros spring to mind.

Jim