Thread: Inflation

Probably. They have a history of acting too late, and then overshooting. But recession or out of control inflation... pick your poison.

Everyone knows inflation is on fire. This is what’s really fueling it

Inflation doesn’t just happen at the gas pump and the grocery store. There are literally hundreds of avenues that filter into broader measures the government uses to gauge price increases.

The big three inputs for the consumer price index, the most widely followed inflation measure, are food, energy and shelter.

More: https://www.cnbc.com/2022/06/16/ever...ueling-it.html

Inflation figure that the Fed follows closely hits highest level since January 1982

The personal consumption expenditures price index rose 6.8%, the biggest 12-month move since the 6.9% increase in January 1982. The index rose 1% from May, tying its biggest monthly gain since February 1981.

https://www.cnbc.com/2022/07/29/infl...uary-1982.html

"A full half percentage point"

Is Inflation 5% or 14%? It Depends on How It’s Measured
Inflation was raging in 1980 and again in 2022. How the government measures inflation has changed, and you will be amazed at the difference.

How the inflation rate is calculated impacts many aspects of our lives. Two prime examples impact the federal workforce—at least when an individual retires. The amount of the annual cost of living adjustment (COLA) is determined by the inflation rate. The inflation rate also determines the amount of any increase in Social Security payments. Keep in mind that Social Security amounts may vary on whether a retired federal employee is in FERS or the older CSRS system.

https://www.fedsmith.com/2023/04/19/...-its-measured/

Originally Posted by tsptalk

Is Inflation 5% or 14%? It Depends on How It’s Measured
Inflation was raging in 1980 and again in 2022. How the government measures inflation has changed, and you will be amazed at the difference.

IMHO, inflation is an unescapable tax on our resources & time.

The Fed is passing down the cost to all of us, the corporations are passing down the cost to all consumers (while performing layoffs/hiring freezes & reducing employee wage increases). All of this so the fed can pull back the money the government shouldn't have spent in the first place.

I would have gladly given back my stimulus check to avoid this mess.

Sry for the rant.

I agree. It's a sneaky way of increasing tax revenues without raising tax rates. Prices go up because they deflated the dollar. So, salaries have to go up to supposedly keep up. So, you pay more income taxes. You pay more in property taxes. More in sales taxes. More...

My rant about the fed was how they sliced interest rates to nothing, essentially forcing retirees who didn't have pensions and put their life savings in CDs saw their income drop by like 80%. They saved all their lives and were content making about 5% on their money. Then bam, they got 1%. Forced them to draw down their savings. Now that the tide of low interest rates and liquidity is ending, their savings are down to nothing and prices have skyrocketed.

Originally Posted by JTH

IMHO, inflation is an unescapable tax on our resources & time.

The Fed is passing down the cost to all of us, the corporations are passing down the cost to all consumers (while performing layoffs/hiring freezes & reducing employee wage increases). All of this so the fed can pull back the money the government shouldn't have spent in the first place.

I would have gladly given back my stimulus check to avoid this mess.

Sry for the rant.

Jerome Powell, 5/03/23

“We on the committee have a view that inflation is going to come down not so quickly, it will take some time. In that world, if that forecast is broadly right, it would not be appropriate to cut rates.”

Transitory sources of inflation are drying up, but the consumer's willingness to pay up will keep inflation rates elevated. Greg Ip of the Wall Street Journal argues that the feedback loop of higher prices and rising wages will keep the inflation rate elevated. The Federal Reserve's pace of rising borrowing costs will not be enough to break the cycle. Their goal is to bring inflation to their 2% goal without pushing the economy off the edge and into a recession, but that might not be possible.

Whether wages are driving prices or vice versa may soon be irrelevant. Once inflation has settled at a higher steady-state rate, wages and prices rise together...In such a situation, it can take a deep recession to get inflation down.

We May Be Getting Used to High Inflation, and That’s Bad News