It suggests to me that the financial world has pretty strong faith in Jerome killing inflation pretty quickly.

I’m not sure he’s going to be as successful as they think. Food and commodity inflation are going to be significant and entrenched.

Bucke up, it might be a bumpy ride.

Inflation, %6.4?

You can only hope that inflation is below 10%.

The last 8 times the yield curve inverted this much, there was a recession within months. Inflation is insidious. But you have people like Pocahontas screaming for political points that unemployment may rise. She acts like a savior for 2 million people that may lose their jobs but doesn't give a schit about 350 million losing 10% of their buying power. Typical Democrat retard who can't think systemically.

Powell really hasn’t said anything different than previously.

I think you’re right about food and commodities inflation being with us for a long while.

The lag time of cause (rate rise) and effect isn’t immediate.

The people who are pushing the message that everything's going to be fine as soon as possible are the brokerages and fund managers because they make a lot more money when there's a bull market. And they're pitching their hype to stock market crack addicts that buy the dip every time without exception. Problem is that prevents capitulation and drags the bear market out even longer.

Mortgage applications at 28-year low

The markets have held up better than I would have thought and inflation is proving tougher to control than the Fed expected. I'm bearish but wouldn't be surprised if the government actually lets inflation run higher for longer instead of interest rates.

The markets believe Powell will just make inflation go away with interest.

I find that a poorly supported belief. The last Great Inflation didn’t just happen out of the blue. The cost of energy tripled overnight, and prices were off to the races.

This time, Covidiocy provided the shock, but what is really driving prices up today is not the shortage of goods, it’s the shortage of LABOR to make the goods. That labor shortage is pulling labor into manufacturing, away from services. Raising interest rates is going to slow down capital investment, further increasing labor demand, further increasing wages. Particularly in services, as we are now seeing.

In todays inflation scenario, the commodity in short supply is labor, and to address it, capital investment should be increased, not decreased. Yet, we are trying to decrease capital spending by increasing interest rates.

Group think is a thing, even in economics.

I greatly fear the fat is in the fire.

Sure are a lot of government and otherwise caused shortages under this administration right down to toilet paper.
The only shortage we need that would do any good is a shortage of paper for printing money.
They must have a massive warehouse full of that hidden away somewhere.

Osky

It's not rocket science. Interest rates have to approach inflation rates,maybe exceed them.

When interest rates hit 7-8%, the inflationary dollar should cool.

Tax cuts would help,but we know the commies in charge won't consider it.

Tax cuts would increase demand, fueling inflation.

What should be done, and should have been done a LONG time ago, is to restart student loan payments. That would have a significant impact on spending, immediately.

Second, we should increase labor availability. Active, regular reviews of disability status and other welfare programs prone to abuse. Limit student loans to no more than the annual average income in the chosen field. Remove the tax penalty for working while on SS.

Lots of ways to increase supply of labor and decrease spending that would be good for this country.

A slow steady increase of 2-3 points over the past 4-5 years would have done wonders.

Tax cuts would increase demand, fueling inflation.

What should be done, and should have been done a LONG time ago, is to restart student loan payments. That would have a significant impact on spending, immediately.

Second, we should increase labor availability. Active, regular reviews of disability status and other welfare programs prone to abuse. Limit student loans to no more than the annual average income in the chosen field. Remove the tax penalty for working while on SS.

Lots of ways to increase supply of labor and decrease spending that would be good for this country.

Words of truth in the above statement!
Best common sense statement on this forum in a LONG time.

America was emerging from a stagnant and inflationary period during Richard Nixon's presidency. And, it somewhat stabilized during Jery Ford's presidency. But, it fell off the map with Jimmy Carter. I see the same thing happening again right now. Joe Biden is a token president only. His staff and the cryin' chucky schumer are running America and we see the results. If we don't get another Ronald Reagan in 2024 America is done.

For you folks who live in a blue State I'm sorry for your plight but you are screwed. You may never see an honest election again. America may never see an honest election again if the democRATs have their way. They are holding up pretty well for a party that is getting desperate to survive.

kwg

A liberal talking point. Historically, tax cuts have never driven inflation. Government spending/fed printing drive inflation.

The great Art Laffer said, "raise interest rates,cut taxes, melt inflation." He did it in the late 70's/early 80's with Reagan.

Yep.

“Too much money chasing too few goods. Can’t really destroy money that’s already been printed, so the other way to take it out of circulation is making folks pay their debts, rather than buying “toys”, and keep taxes where they are, for the time being (unless it’s something that stimulates someone to get off their azz and start working).

Folks feeling a NEED to work (rather than sitting around and spending stimulus money on the internet or living off their parents), would definitely help..

Inflation is way above 10% at this point.

We all know about Germany between the wars.

Government overspending, as in the many extraneous social programs and the Ukraine war, will burden us with inflation.

The pain is only beginning. They only know how to spend, print,and tax. The war on fossil fuel, is making things 1000 times worse.

Dutch, I agree with most of what your posted if not just to tamp down inflation, but also just good fiscal hygiene. But we know how far that would go in Washington.

However what is your logic behind removing the tax penalty for work on SS?

I would assume it would incentivize some older folks to KEEP working, and help with the labor shortages we’re having.

We're do you think the toilet paper is going.

How does that help with inflation?

Because employers can find (older) workers for $15/hr, rather than having to offer $25/hr, and passing the “inflated” cost along to customers??????

(Too much money chasing too few WORKERS (rather than goods, in this case. It increases the number of potential workers, since folks are incentivized to work longer in life)

Mmmm... Maybe.

But I'm thinking of it from a monetary supply side increase and stifled energy production, not wage inflation. Seems that this wouldn't reduce the amount of money available as would something like restarting student debt payments.

If the cause of this current round of inflation is because of government spending (Later COVID relief, debt relief, and the $1.7T spending bill in Dec), and I believe it is along with artificially capping energy production, then I don't see how wages are contributing much.

Is there much if any wage inflation, yet?

Supply and demand. The Fed chokes demand while the Dems choke consumer supply by spending on government programs and paying people not to work and flooding the supply of money. The Fed refuses to acknowledge the cross currents. It can't end well without a change in administration and soon.

Wage inflation???
That guy flipping your burger is making $20 an hour, now. Three years ago, he was making $10……

Good point.

Yep. Check out this pay raise for commercial pilots:

https://onemileatatime.com/insights/pilot-pay-raises-sustainable/

It's not complicated. The only shortage that would be beneficial is a scarcity of paper for printing money.

The Mortgage Market Cum’n to a Halt if J. Rome Continues his Quest..

Banks make the Spread between Short End T’s an Loan at a Rate which is Above That ..

If the Short End is Higher than the Long End then it’s 52 Card Pick Up ..

The End ..

It's not even paper, dots on a computer screen.

There’s also a supply side to getting more people working. People who work PRODUCE goods and services. People who retire don’t. If a person of retirement age keeps working, they commonly will spend a bit more, but not everything they make. So the SUPPLY of goods and services increases by a full worker’s share, but the DEMAND for the goods and services they produce grows only a fraction of that full share.

Likewise, if you can move someone into the workforce instead of going to grad school for gender studies, they produce a full share rather than zero, but their consumption only goes up a fraction of a share.

Both examples of how increasing the workforce is anti inflationary.

Conversely, increasing unemployment by reducing business activity reduces the number of people producing, but not the number who are consuming. That is clearly inflationary.

Now, I’m not at ALL opposed to a guy making $20 an hour for changing my oil or bagging my groceries. Well paying jobs are good for our society. But just making all the numbers bigger (wages and expenses) doesn’t do anybody much good.

And neither does jacking up the interest rate to “slow down the economy”. It’s asinine.

The inflation spiral,in the 70’s was started when Carter misjudged OPEC and the oil shock happened. It ended DESPITE Volcker making it worse with his interest rate policy when the price of oil came back down.

But, economists like to think they “solved the crisis”.