Jay Powell should listen to Gandalf about 2% inflation

Fed Day, Middle Earth edition. [Bloomberg]( This is Bloomberg Opinion Today, the doomed dog of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - The Fed’s gotta toss [its 2% ring](. - [Kristi Noem’s cruelty]( is MAGA’s thing. - [$61 billion]( might not [make a ding](. - [Academic research]( is one big sting. Fed Day, Middle Earth Edition Did you hear? Bloomberg Opinion has a new columnist! His name is Olórin. The editors nicknamed him Mithrandir, but that’s a bit of a mouthful. So, uh, we’ll just call him Gandalf: Now, you may be thinking, Gandalf looks awfully familiar to Marcus Ashworth, our European markets columnist. Just the other day, Marcus [said]( the Fed’s 2% inflation target should be “put back where it belongs — as part of a wider monetary policy toolkit, not the one-tool-to-rule-them-all.” While the resemblance is uncanny, you’d be mistaken! In Gandalf’s [debut video]( for us — edited by Michael Johnson and scripted by Christina Sterbenz — the wizard explains why Middle Earth’s ring of power is the perfect metaphor for central banks’ 2% target, which rules everyone — even the [Girl Scouts](, apparently. “Imagine inflation is Sauron and the orcs. At the height of the pandemic, inflation was everywhere. Food prices were ripping, villages were almost being starved — not quite, but hobbits do need to eat seven times a day,” Marc — err, I mean, Gandalf quips. “Think of central bankers as the Fellowship of the Ring, coming together to jointly fight inflation. Much like Boromir thinks he can use the ring to defeat Sauron, so, too do central bankers think they can use this 2% inflation target to beat price rises. But in reality, they’ve become slaves to their own power. This target has become something of a mythical force which they can’t break away from and it’s causing serious issues.” Luckily, Gandalf says US Fed Chair Jerome Powell is aware of the risk: But is he going to do anything about it? John Authers isn’t holding his breath. In his latest edition of [The Year of Descending Dangerously](, he says Powell’s “optimism for rate cuts has diminished significantly since the start of the year. That’s because the disinflation process that fueled this expectation has stalled, while the economy remains robust. There’s an ever increasing possibility of an inflation resurgence that might even push rates higher again.” Indeed, the Fed expressed those very worries today in its [press release](, saying “the economic outlook is uncertain,” and “there has been a lack of further progress toward the Committee’s 2% inflation objective.” As much as new hire Gandalf wishes it weren’t the case, the Fed’s [unanimous vote]( to leave its benchmark rate unchanged for its sixth straight meeting is further evidence that the 2% tool is still very much ruling us all. Bonus Central Bank Reading: Japan needs to leave [the yen bazooka]( at home. — Daniel Moss If Only Kristi Noem Were Reading This There’s a lot of things you could say about Kristi Noem’s decision [to shoot]( her 14-month-old puppy and publicize it in her [forthcoming book](. That she won’t be getting the endorsement of the [Humane Society]( anytime soon. That she may have [doomed her political career](. That she may have [avoided it all]( if she had [subscribed]( to a certain newsletter: But Francis Wilkinson [takes a different tack](. “If you take the spotlight off the doomed dog, or the goat Noem claimed to have killed in crueler fashion (two shots were necessary), you can see how her ghoulishness fits into the mad mosaic of MAGA,” he says in his latest column. “It’s the [cruelty](, of course. And the gun.” Consider the [rotting aesthetic]( of Trump’s America: You’ve got family [Christmas cards]( with young children holding semi-automatic killing machines, deadly shooters [cosplaying]( campus celebrities and elected senators [cooking]( bacon on an AR-15. These are things that chip away at society’s moral compass. “Noem’s Cricket story didn’t drop into this moral pit from outer space,” Francis writes. “It wasn’t inserted in her manuscript by accident. It’s there to signal solidarity with a political culture that increasingly honors cruelty and valorizes violence.” Read [the whole thing](. Ukraine on the Brain “What if Russia beats Ukraine?” As it turns out, not even $61 billion can make this question go away. Instead, the money that Washington sent to Kyiv last week was merely a means of averting catastrophe. Even with billions of dollars, Hal Brands says, Ukraine still faces [a manpower crunch]( and risks losing more territory before the end of the year. “American aid will undoubtedly bolster Ukraine’s defenses,” he notes, but “it probably won’t be enough to help this Ukrainian military — which has shown little talent for complex operations against well-prepared positions — evict the enemy from its land. And even if Ukraine does stymie Russian attacks and inflict awful casualties on Moscow’s forces, there’s no guarantee Putin will call it quits,” he writes. Marc Champion, meanwhile, [says]( there’s been a lot of chatter around what might happen to Europe and the larger neighborhood if Putin’s invasion actually succeeds. Georgia, the small Caucasus country, already appears at risk of falling under Russia’s sphere of control and influence. Bidzina Ivanishvili, a prominent Georgian businessman, is “using the same paranoiac, unhinged language and gaslighting that Russian leaders spout daily,” despite his sympathetic stance flying in the face of what most civilians want. Bonus Battle Reading: If US and Israel don’t honor [the laws of war](, nobody will. — Andreas Kluth Telltale Chart As we learned in the Netflix drama [Baby Reindeer](, the authorities have a finite amount of resources to investigate fraudulent behavior. And that’s especially true in the world of academia. In the past decade, the US government spent $471 billion supporting scholars, but Bloomberg’s editorial board [says]( a troubling proportion of their work “is riddled with errors, plagiarized or fraudulent.” Although the Office of Research Integrity is supposed to investigate all that misconduct, the office is [hobbled]( by bureaucratic dysfunction. It’s a waste of taxpayer dollars and the editors say more transparency is needed to hold researchers to account. Further Reading Amazon’s Swiss Army [knife strategy]( is paying off. — Dave Lee Got milk? The bird flu outbreak has [more questions]( than answers. — Lisa Jarvis The world’s biggest banks are [increasingly constrained]( by the need to find money. — Matt Levine B-School blather [doesn’t beat]( real-world CEO know-how. — Adrian Wooldridge Only two people have ruled Foxconn in 50 years. Now, [six more]( could be added. — Tim Culpan A plan to [“name and shame” firms]( before an investigation is complete? You’re mad. — Marcus Ashworth ICYMI Florida’s six-week [abortion ban]( is now law. US and the Saudis are working on [a defense pact](. Wait, Michael Cohen has been doing [WHAT]( on TikTok? [Nearsightedness]( rates are soaring. Kickers Put those [Baby Bieber]( rumors to bed. Is everyone gatekeeping [sweet soups](??? Starbucks is [absurdly late]( to the boba tea party. North West directed her first [music video](. [Jokes]( for the grammar nerd in your life. Your daily reminder([s]() that [LinkedIn is a joke](: Notes: Please send [dessert soups]( and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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