Fed Rate Hikes Inflation

You forgot about the fed raising interest rates to combat inflation. As history shows this usually leads to a massive recession in the short term

When there's no worries about inflation, is there a downside to the fed doing this?

Spot on. Listen to the language the Fed uses and this is the clear answer, recently they have been saying things like "we still have a lot of work to do on inflation", "the banking sector is resilient", etc.

Will the fed raising interest rates fix it?

Why would the Feds want inflation and not a flat line?

Inflation, as a rate of change, is dynamic. The Fed aims for it to be about 2%, but 7% is much too high so they are ramping up rates to put a stop to that. Prices rarely go back down (consistent falling prices would be deflation, which tends to be economically disastrous as it rewards doing nothing) but the rate can fall which is what he's referring to.

The Fed as we have seen definitely "has the power" to raise rates. The question behind your question is, to what extent does raising rates lower inflation? I'm not an economist, just some guy on HN, but I'm pretty persuaded on the idea that inflation is, as others have said, a "monetary phenomenon." If you strip away money for a second, the "actual economy" is just supply (people making stuff), and demand (people buying stuff). Now imagine we're back

Why do you say it has shifted "for good"? The Fed itself plans to bring interest rates back down actually fairly quickly [0], following a half-year of decreasing inflation rates [1].[0] https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20...[1] <a href="https://www.statista.com/statistics/273418/unadjusted-mon

this drop is more related to the FED increasing the interest rates

The cause of this round is not some sudden bubble burst. Fed raise rates because they want to signal that they are serious about taming the inflation. That caused sharp sentiment change in capital market.The cause of this round of inflation can be many things, we've been in low-interest environment for 10+ years with occasional QEs. It hasn't inflated the economy as much as we hoped for that 10+ years. It is lazy thinking to attribute back to QE for this round of inflation.