Chamath @ 01:10:33Wrong
economygovernment
In response to the economic impact of Russia sanctions and recession risks in 2022, Federal Reserve Chair Jerome Powell, the Biden administration, and allied governments will likely shift to a more accommodative stance, effectively resuming monetary expansion ("money printing") to support the economy while maintaining strong economic sanctions on Russia, with the goal of engineering a soft landing instead of a recession.
I think there could be a real possibility that Powell becomes very accommodative. And, you know, he and Biden and the entire administration come together with Europe and everybody else and say, get the money printer back going, because we are we are going to stand the line on these economic sanctions and we're going to, you know, sort of soft land, the economy here because we think there's recessionary risks afoot.View on YouTube
Explanation
Powell and U.S./allied policymakers did not become more accommodative or restart “money printing” in 2022 in response to Russia sanctions and recession risks.
Key evidence:
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Aggressive rate hikes instead of accommodation (2022):
- The Federal Reserve began raising rates in March 2022 and then executed a rapid series of hikes (including multiple 75 bps moves), taking the federal funds rate from near zero to around 4.25–4.5% by December 2022—its fastest tightening since the early 1980s, aimed at fighting high inflation, not accommodating growth.
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Quantitative Tightening (QT), not renewed QE:
- In June 2022, the Fed started shrinking its balance sheet by allowing Treasuries and MBS to roll off, i.e., reducing its holdings (quantitative tightening), which is the opposite of resuming large-scale asset purchases or “getting the money printer back going.”
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Policy stance clearly framed as anti-inflation, not soft-landing-at-all-costs:
- Powell and the FOMC repeatedly emphasized that restoring price stability was the primary objective, even at the cost of slower growth and higher unemployment. This is a classic restrictive posture, not an accommodative one designed mainly to cushion Russia-related shocks.
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Sanctions were maintained without offsetting monetary easing:
- The U.S. and European allies imposed and then sustained extensive sanctions on Russia (financial sector restrictions, export controls, asset freezes, oil price cap, etc.) through 2022 and beyond, but this was paired with tight monetary policy rather than renewed expansion. Fiscal measures (e.g., IRA, CHIPS) were structural/industrial rather than emergency macro stimulus of the 2020 type.
Given that:
- The Fed tightened aggressively (higher rates + QT).
- There was no resumption of QE or broad monetary expansion in 2022 in response to Russia sanctions.
- The policy goal publicly prioritized controlling inflation, not primarily engineering a soft landing via accommodation.
The core prediction that Powell, Biden, and allies would “get the money printer back going” and become very accommodative to soft-land the economy while keeping sanctions did not materialize.
Therefore, the prediction is wrong.