Dmytro Kharkov

Supply shocks impact growth and Fed policy, Eric Basmajian notes

Supply shocks impact growth and Fed policy, Eric Basmajian notes
Supply shocks affect inflation and policy

Eric Basmajian shares a simplified visual illustrating the relationship between supply shocks and their effects on economic growth, inflation, and U.S. Federal Reserve policy decisions.

The tweet presents an overview of how changes in supply can influence key financial variables and central bank actions.

Basmajian's latest visualization builds on his ongoing examination of macroeconomic dynamics, complementing earlier findings on the rapid cooling in interest-rate sensitive sectors. These themes also resonate with his previous analysis highlighting periods when the real Fed Funds rate remained negative during U.S. economic expansions, further underscoring the complex interplay between monetary policy and supply-driven shifts.

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