All the data so far is showing inflation isn't going away, and is making things tough on the Fed
All the data so far is showing inflation isn't going away, and is making things tough on the Fed
The last batch of inflation news that Federal Reserve officials will see before their meeting next week is in, and none of it is very good.
Key Points
- Commerce Department indexes that the Fed relies on heavily for inflation signals showed prices continuing to climb at a rate still considerably higher than the 2% annual goal.
- The stubborn inflation data raised several ominous specters, namely that the Fed may have to keep rates elevated for longer or even have to hike at some point.
- Thus far, the economy has managed to avoid broader damage from the inflation problem, though there are some notable cracks.
Why would companies voluntarily reduce their prices when they're making record profits? They'll squeeze us until we're dry.
Monetary policy that worked historically did so I'm an environment where monopolies and oligopolies were broken up to prevent price gouging.
And they were taxed enough to keep them from getting "too big to fail".
They also didn't have the fucking Internet and algorithmic price fixing that spreads throughout the market immediately.
Very puzzling to me that anyone is blaming government spending for inflation. Is that just a corporate scapegoat?
No, new money entering the economy comes from the government and government spending is one of the ways that happens.
Government spending is doing some heavy lifting here.
Yeah, if you are Zimbabwe and you are minting your currency like there's no tomorrow while all your debt is in USD. Your currency is at a huge disadvantage and you'll hit trillion dollar bank notes in no time.
Rich countries trade massively while they require poorer countries to hold debt in the currency the richer country controls. This makes rich countries too big to fail, because their currency failing hurts everyone. As long as a rich country is growing their economy they can mint as much as they want.
Japan is taking this to extreme levels with their debt to gdp because they are fighting deflation from an aging population. Russia had double digit inflation because of Western sanctions, but they literally spent their way into single digit inflation with their war economy.
This "fiscal responsibility" from conservatives is actually hurting the US economy. The only inflation the fed is fighting rn is high wages for workers. Don't fall for the propaganda.
It's a long-standing observation of economists that government spending leads to inflation. Probably the simplest model is that the government is increasing demand without increasing supply.
Note that in this model, taxes have a deflationary impact because they reduce demand from individuals.
This is not an opinion on how much government spending is affecting current inflation (nor how much inflation is to blame for any particular category of goods).
Hey at least corporate profits are near all time highs though! It's great! Gonna trickle down any time now!
I'm afraid to ask this, but is that adjusted for inflation and normalized by business entity or similar? I know corporate greed is out of control, I'm just trying to figure out if that graph is good representative data or not.
Cmon..... Break already...
In all of this, the Amish are probably not affected.