Self-evidently, therefore, interest rates below the inflation level are a stimulus because they amount to economic subsidization of debt, and the spending or investment which results.

Still, even the primitive Phillips Curve theory of the growth/inflation trade-offs screams out that the Fed is way behind the curve, even based on its own defective economic models. After all, why in the world has it permitted its ultimate control valve and benchmark—the 10-year UST—to carry a negative real yield for 36 of the last 38 months.

That's right. There is nothing like the pattern shown below in modern history, yet somehow the Keynesian dunderheads domiciled in the Eccles Building have been surprised at the virulence and persistence of the current inflationary tide.

Indeed, they more or less begged for it. For instance, Lael Brainard is one of the leading so-called policy-thinkers on the Fed, but just 33 months ago in February 2020 she generated a Bloomberg headline which read, "Fed's Brainard Calls for New Strategy to Boost Inflation" and included the following gems:

Federal Reserve Governor Lael Brainard on Friday called for the adoption of new strategies by the central bank to achieve its 2% inflation goal and fight off future recessions.

The Fed should seek above-target price gains to make up for past inflation shortfalls and should cap Treasury debt yields if it's forced to lower short-term rates as far as they can go in a downturn, she said in a speech in New York.

"Today's low-inflation, low interest-rate environment requires not only new recession-fighting tools but also a new strategy to address the persistent undershooting of the inflation target — and the risk to inflation expectations — well before a downturn," she said.