In a prior post (here), I concluded that Both Trump II and the Federal Reserve (the Fed) are right: Interest rates are too high and they can't be lowered given the economic uncertainty of Trump II policies. So, from the graphic of the Federal Funds Rate (FFR, the Fed's primary policy tool), interest rates need to get down to the attractor path from the USL20 model, but we are still way above the 98% prediction interval for the attractor path.
From the perspective of Cybernetics, which likes to think in terms of control bands, the Fed has been an Over-Controller.
From the perspective of Systems Theory, the attractor path graph brings up the question of how good a controller has the FED been historically? There are some very interesting departures from the Attractor path during the Late and Long 20th Century:
- The Volker Deflation
- COVID-19 Pandemic
- COVID Rebound
Notes
USL20 FFR 2026 Model
USL20 Measurement Model
