Why The Fed's Dual Mandate Is Doomed (In 2 Simple Charts)

Tyler Durden's picture

While the Fed's official 'mandate' is do no evil maximize employment with stable prices, it is perhaps better understood (in recent decades) as pump credit, create bubbles, hope for job creation, and hope that inflation does not get out of control. So the following two charts from Citi suggest the Fed, no matter how much Taper or un-Taper they do, face some serious demographic headwinds from rising inflation and plunging stock valuations.

 

Inflation will rise...

 

And valuations will tumble...

 

Unless it's different this time... Did Bernanke escape at the Fed's peak demographics moment and leave Yellen to clean up his mess?

 

Charts: Citi