They aren't "trapped" this is the natural and expected consequence of creating a lot more money to sidestep a temporary condition. Considering the US is the strongest-ish economy in the world and the rest of the world had to do the same thing, there shouldn't be terrible consequences as long as nobody does anything really stupid.
Bitcoin, gold, and anti-fed fanboys have a tendency to have a poor understanding at best of global economics with very basic misunderstandings like thinking that bumping the rate bumps the rates of all previous bonds.
Some people who do advocate for those things do know what they are talking about and can argue valid points which are up for discussion, but you don't actually see those very often.
Monetary policy in the US has made major mistakes, but it has been doing a pretty good job, and importantly has avoided the worst kinds of disaster for a long time. What it did during covid was essentially the only option, what a gold standard economy would have been able to do would have led to much worse outcomes.
People will complain about anything. The HN crowd generally overestimates its expertise in matters not related to startup tech (i.e. physics, engineering, economics posts often have pretty awful comments)
Discussion on this post is worse than the usual level of discussion here, and the usual level around these topics isn't great at best. Hard to discuss monetary policy with someone who doesn't know what monetary policy actually is.
25bps wont help 7.9% inflation. We cant substantially raise rates like the 80s because there is too much debt. The current war will cause trade & commodity issues that wont reveal themselves till late this year. The current admin just signed another 1.5 trillion. And they will keep creating money to finance war or bail out bad situations they themselves created. Middle class and lower are screwed
There are discentralized digital currencies that don't require insane energy consumption. But since clean energy is essentially unlimited on our planet, this isn't a reason to avoid conventional blockchains (that reason would be their abysmal scaling behavior). None of them provide any price stability at all -- or wouldn't, if more than precisely zero goods and services were priced in one of them. (Certain DeFi markets have elements of a banking system that might, concievably, offer some price stability.)
The COVID-19 helicopter drops -- which were performed by the Treasury, not the Fed -- certainly could cause inflation. But this would generally be an inflationary shock, not an ongoing inflationary regime. Instead, it's the lockdowns (or hysteria more generally), which damaged the structure of the global economy. You can think of the inflation as the cost of rebuilding these networks, of convincing people to work together again. Simply put, things become cheap when they're produced by efficient networks. If those networks decay, things become more expensive.
The reason you need a reasonable risk-free rate is, without that, almost any marginally profitable that you can finance with debt will get financed. This leads to malinvestment. You can see this all around you.
Asset inflation has the insidious side-effect of damaging democracy by producing oligarchy.
An alternative solution would be simply to declare a maximum net worth and set tax rates on income over, say, $1m per year to 95%.
If I misjudge a cool jump off the roof into the pool and catastrophically break both my legs, then my legs are broken.
And in a different thread will trash bitcoin only focusing on its energy consumption and not its potential sound money properties.
If Bitcoin is bad, and the Fed (and every government ever) created a situation which will only lead to poverty & widening wealth gap, whats the solution?