Inflation rates varying by location / city.
Various good CEO quotes on supply chain issues and the Fed being way too slow on the uptake against inflation. Auto and semiconductor shortages likely to continue.
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Wholesale prices rise 1% in January, up near-record 9.7% over the past year
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The producer price index, which measures wholesale prices, rose 1% in January and 9.7% for the 12-month period, the latter just off the record high.
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Core PPI rose 0.9%. Both increases were at least double the Wall Street estimates.
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Manufacturing in the New York region increased modestly in February but was below expectations. The prices received index soared to a record high
This keeps up, pretty soon we’re gonna have REAL inflation!.
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I think that’s the sentiment from most people. What more did the Fed need to know in December or January about inflation, job market, and financial markets that made them delay hiking rates until March? Do they believe that this inflation is only caused by supply chain issues against which they don’t anticipate rate hikes to have much impact?
Personally, I think the Fed are still under the impression that things move at the speed they did 20 years ago and are responding accordingly.
I tend to think that they believed the temporary conditions (such as supply issues) that were causing the inflation would be addresed and solved, rather than swept under the rug with smoke-and-mirrors (like redefining the parameters of the port problems so it doesnt look like a problem anymore).
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The latest democratic proposal in order to control gas price inflation is to suspend the gas tax through the end of the year midterm elections. It sounds like only the Democrats are willing to go along with this.
“The cure for high prices is high prices”
And maybe less printing of billions of dollars, I’m looking at you JPowell.
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This is what you get when you elect someone who’s campaign strategy was “I’m not Trump!”
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Biden solved port congestion, so our supply chain and transportation cost inflation should be back to normal any day now. Right?
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Meanshile, across the pond, they see high inflation peaking about 2% higher than now this April.
https://abcnews.go.com/International/wireStory/uk-inflation-rises-fastest-rate-30-years-82923616
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April’s Fool certainly sounds like it’s gonna be a doozy in the UK with gas/electricity increasing by 54% and income tax increasing by 1.5% that same month. One interesting thing is that the Bank of England already increased its key interest rate to 0.5%. Not that much of an immediate impact for sure considering their outlook for April.
Munger: Inflation can be the way democracies die
Munger clearly sees inflation not going anywhere in the decades ahead and he offered this discouragement to anyone looking to parking their money in currency for the long term: “I think the safe assumption for an investor is that over the next hundred years, the currency is going to zero," he said. "That is my working hypothesis.”
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Was going to post Mungers comments, thanks. Here’s one of the Fed guys
Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank needs to move forward its plans to raise interest rates to underline the Fed’s inflation-fighting credibility. “I do think we need to front-load more of our planned removal of accommodation than we would have previously,” Bullard, who votes on monetary policy this year, said in an interview on CNBC on Monday. “These are numbers Alan Greenspan never saw,” Bullard said, referring to the former Fed chairman. “Our credibility is on the line here and we do have to react to data.” Bullard repeated his view that the Fed should raise interest rates by 100 basis points by July 1, and start shrinking its balance sheet in the second quarter, in response to the strongest inflation in 40 years
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Supply chain charts at the end, good macro piece generally
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Our indigenous senator is going to solve inflation by siccing the FBI and DOJ on any business charging more than she says is allowed. Price controls worked so well in the 1970s and she’s old enough to have had, and failed, the opportunity to learn from that.
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Perhaps instead of being outraged over and then sharing this bullshit piece, you should read the actual DOJ press release (there’s a link right in the article!). You’ll find that it only talks about illegal collusion schemes, like antitrust violations and price fixing (i.e., multiple supposedly-competing businesses break the law while nobody’s looking). All within their purview, not at all outrageous, and nothing even remotely close to price controls.
I mean, it’s not just me that thinks that Warren is off the deep end here. Just ask the White House economists -
Members of the White House Council of Economic Advisers had raised objections to the idea that a spike in prices was due to corporate power, according to two people aware of the matter who spoke on the condition of anonymity due to fears of professional reprisals.
many economists, including those influential with the White House, think these arguments are strained. In particular, they say high corporate profits and high prices are both the function of the same underlying cause of elevated consumer demand. Higher demand leads companies to raise prices, causing inflation, which in turn leads to higher profits. Even many liberal economists, such as Baker and Claudia Sahm of the Jain Family Institute, have dismissed the argument that consolidation accounts for a major part of inflation.
Here’s the punchline, from WashPo no less -
Democratic pollsters have told the White House that a populist economic message on corporate greed and prices broadly resonates with voters.
People are suffering and people are mad and by definition the Democratic politicians can’t be wrong, so inflation must not be their fault. Then the question becomes who to blame. They can’t blame the Republicans since they have no power now, and they don’t want to blame the Fed (whose fault it is, more or less, for not acting appropriately and sooner), so they trot out some corporate bogeyman.
Warren’s thinking on this is as bankrupt as her articles on bankruptcy.
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That all may be, but none of it is in the DOJ release.
Just because it’s within their purview doesnt mean it’s any less of a witchhunt.
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It also doesn’t mean it’s a witch hunt at all. They’re doing what they’re supposed to – their job.