dajo9 said:
For the first time in his 20+ year career influencing public policy many are finally saying Lawrence Summers is right this year in his prediction of inflation.
But Summers didn't just predict inflation - he predicted an economic slowdown. We may see an economic slowdown but only if the Fed overreacts. I think if we didn't have partisan blinders we'd all agree that with zero interest rates and QE, we WANT inflation. The inflation and growth we are seeing is a sign that the fiscal stimulus is working.
The best end result would be the Fed GRADUALLY raising interest rates. If they can get their rate back up to 2% with real economic growth and modest inflation that would be a monumental success.
I'm sorry, but your post above clearly shows how "young" you are when it comes to the economy, financial markets, and monetary policy. More "cut and paste" from your favorite progressive politician perhaps?
In fact, if I were you I'd be asking for a "refund" from the school where you earned your MBA from.
Given your progressive politics . . . it's comical that you believe that we WANT inflation!
Inflation
cripples the lower economic classes of our country because they are primarily renters.
The cost of rents and and owner's equivalent rents (OER), by far
the largest share of the CPI, have risen only 3.5% and 3% in the past year. That's a fraction of the 14.3% rise in Zillow's Observed Rend Index and the 19.5% increase in the Case-Shiller Home Price Index. - - - Because of how they are calculated, OER and rents are notorious laggards and will pick up sharply at least through the end of 2023.
So, the lower economic wage earners (renters) are about to get absolutely CRUSHED BY INFLATION.
Do you really believe this is what Sanders and your economic "guru" Elizabeth Warren want to see happen?
For some bizarre reason, you are totally unaware of inflation's over-weighted negative impact on middle and lower income classes. This is Basic Econ 101a.
Meanwhile, the Federal Reserve is so far behind the curve when it comes to dealing with inflation its not even funny. In case you havent noticed,
real rates are dramatically negative. In fact, real short-term rates are at their lowest levels in 4 DECADES.
It's also terribly naive to think that the Fed has ever been successful when it comes to combating inflation in a
gradual manner that doesnt cause an economic slowdown.
I literally blew my coffee back into my coffee mug when you said, "
Only if the Fed overreacts"You clearly havent been following the history of monetary policy with the FED over the years.
If you did, you'd be very much aware that there have been very few times in history where they havent
overreacted and/or caused a slowdown in the economy from tightening . . . because they've been so late to pulling the punch bowl at the party.
Federal Funds Rate - 62 Year Historical Chart | MacroTrends