“Far from controlling consumer price inflation, the Fed is in the unenviable position of being controlled by consumer price inflation. The price pressures from energy pricing have existed with or without the Fed’s rate hikes, and they are driven by events wholly outside the Fed’s ambit, in particular the ongoing wars in Ukraine and the M…
“Far from controlling consumer price inflation, the Fed is in the unenviable position of being controlled by consumer price inflation. The price pressures from energy pricing have existed with or without the Fed’s rate hikes, and they are driven by events wholly outside the Fed’s ambit, in particular the ongoing wars in Ukraine and the Middle East.
The result? Structurally higher inflation even as the federal funds rate remains high.”
That says it all. But, the Biden administration will do whatever they must in order to win the Election, including manipulating energy prices (via tax cuts, draining the Strategic Energy Reserve, ending the Middle East conflict -whatever). They know that a few days before the Election everyone will be asking themselves, “Am I better off from Biden’s reign, or do I want a change?” The answer better be - at any cost - “yeah, I’m good with Biden”.
Because I want to get rid of Biden’s administration, my preferred trajectory for the economy is for inflation to continue to rise for 7.5 months, so that everyone is ticked off at their polling places. After the Election, I’m hoping that deflationary contagion from China, or possibly new policies, will kick in enough to reverse inflation. Peter, you have studied all of the ‘good little metrics’ (giggle) for years, and have a wisdom now about lag times, lead times, likelihood of stable rates, etc. Juggling all the factors and extrapolating at the rates and prevalences you’ve historically seen, can you give us a ‘likelihood’ of my preferred trajectory occurring? Maybe 50% chance? Or are the pertinent factors, and the future situation in 7.5 months, just too unpredictable to even venture a guess?
“Far from controlling consumer price inflation, the Fed is in the unenviable position of being controlled by consumer price inflation. The price pressures from energy pricing have existed with or without the Fed’s rate hikes, and they are driven by events wholly outside the Fed’s ambit, in particular the ongoing wars in Ukraine and the Middle East.
The result? Structurally higher inflation even as the federal funds rate remains high.”
That says it all. But, the Biden administration will do whatever they must in order to win the Election, including manipulating energy prices (via tax cuts, draining the Strategic Energy Reserve, ending the Middle East conflict -whatever). They know that a few days before the Election everyone will be asking themselves, “Am I better off from Biden’s reign, or do I want a change?” The answer better be - at any cost - “yeah, I’m good with Biden”.
Because I want to get rid of Biden’s administration, my preferred trajectory for the economy is for inflation to continue to rise for 7.5 months, so that everyone is ticked off at their polling places. After the Election, I’m hoping that deflationary contagion from China, or possibly new policies, will kick in enough to reverse inflation. Peter, you have studied all of the ‘good little metrics’ (giggle) for years, and have a wisdom now about lag times, lead times, likelihood of stable rates, etc. Juggling all the factors and extrapolating at the rates and prevalences you’ve historically seen, can you give us a ‘likelihood’ of my preferred trajectory occurring? Maybe 50% chance? Or are the pertinent factors, and the future situation in 7.5 months, just too unpredictable to even venture a guess?