OH MY GOD!!! Inflation now at a 3.4% annual rate! Stock market meltdown, bond yields soaring!

I would concede the that when the adjective "transitory" was initially used the belief was that inflation would last a few months rather than close to a year before the rate began declining. That being said it's currently close to historic norms rather than unusually high. Trump and the Republicans do have the advantage of comparing the current rate to the average of under 2% and well below the historic average during the 10-year period from 2010-2020 which by the way also included Obama's two terms in office was largely attributable to after effects of the most serious recession since the Great Depression.

 

Thread inflation on this subject by you is definitely real

 

You wouldn't know this, but if you're a right wing poster on this forum and you go to start a thread it makes you check a box confirming either a "trans" thread or an "inflation" thread. Only then are you allowed to proceed with your new thread.

 

An objective post????

Who are you and what have you done with our friend VA?

 

To be very clear when I say Government/ fiscal stimulus I’m not just talking about the cash handed to people. I’m talking about the cash handed to business/ state and local Gov and most of all the super low interest rates and easy money Fed policy.

Don’t take my word for impacts of these things..

Biden’s rescue plan made inflation worse but the economy better

“The highest estimate — that roughly half or about four percentage points of the recent increase in annual inflation can be attributed to the rescue plan — comes from Francesco Bianchi of Johns Hopkins University, who presented findings from a paper he co-authored at the Federal Reserve’s annual conference in Jackson Hole, Wyo.“

“Four economists at the Federal Reserve Bank of San Francisco in March, after comparing the U.S. experience to that of other advanced economies, said the combined effects of all fiscal measures in 2020 and 2021 had pushed inflation higher, with the effect peaking late last year after the rescue plan took hold at about three percentage points. And Laurence Ball of Johns Hopkins, along with Daniel Leigh and Prachi Mishra of the International Monetary Fund, arrived at a similar figure for the rescue plan alone in a paper presented at a Brookings Institution conference in early September.”
https://www.washingtonpost.com/us-policy/2022/10/09/inflation-economy-biden-covid/

But it was all supply chain issues..SMH

 

Except so many experts or analysts were sounding the alarm. Just like right now many are sounding the alarm on what is to come yet. Once again Feds will wait until it’s too late to act accordingly.

 

Fed is in a tough spot, yeah they waited too long to raise rates.
But now they are also fighting Government investment from the Build Back Better plan that isn’t going to slow down.
Personal savings down, cc balances up.

Not saying it’s all gonna blow up but there isn’t a clear path at this time. I said months ago a June rate cut would be lucky, now unless there’s a black swan event or a big change it looks like next year before they can start to “normalize” rates.

 

It’s as if we keep looking at the exact same thing, over and over again, yet every time we see it we are shocked as if it’s news.

Most of the inflation is in cpi housing component. As has been explained, cpi housing contains cpi rents and cpi owner equivalent rents, both of which measure the average inflation of all homeowners as of today.

Contrast this to various new rents inflation numbers which measure the inflation in new leases.

The CPI measure is clearly going to lag new rents at least 6 months.

You can see it here

It’s All About Housing: Rental Inflation and Its Measurement Play an Outsize Role in the Consumer Price Index


And here



And here



This shows that new rents shot up a lot around late 2021 but kind of leveled off mid late 2022 and by now are flat. But it also shows that the cpi numbers are lagging, and they haven’t caught up, so we are still going to see above average cpi housing increases for some time.

This Boston Fed model predicted this almost a year ago

https://www.bostonfed.org/-/media/Documents/Workingpapers/PDF/2023/cpp20230216.pdf


Look at these cpi housing forecasts - made in q4 of 2022, based on the prior trending of new rents:



The CPI 12 month rent numbers were around 5 percent - which falls well within these forecasts.

The good news is this component WILL trend down over the next year. The bad news is it will be slow. It’s math.

This shows the painful lag of inflationary policy. Prices go up, so interest rates are hiked, which stops 60% of inflation, and stops new home inflation, but the other 40% reflects higher mortgage rates, which flows through to rents, which will keep pressing upwards for a while.

But by all means, let’s keep posting new threads each month, revealing how we are all shocked and amazed how math works.

 

What Are Interest Costs on the National Debt? (pgpf.org)

But due to the recent rise in interest rates, as well as the mounting public debt, interest payments have grown rapidly over the past two years, and they are projected to continue growing. The Congressional Budget Office (CBO) projects that interest costs will exceed their previous high relative to the size of the economy, reaching 3.2 percent of GDP ($951 billion) in 2025.

 

Do you really think that your little orange dictator is the right person to solve a debt problem? The man is on record as saying that he loves debt spending. So much so that many of the organizations that he has been in charge of have gone bankrupt. What kind of idiocy has to take hold of you when you expect a bankruptcy master to keep your organization out of . . . bankruptcy? Is his con-game really that good? Because I have not been able to fall for it. Help me out.

 

Let me quote from your article so you can stop shaking your damn head.

which you quoted.

almost all legit studies have around 2 points or less from Stimulus which, by its nature is temporary. You don’t keep spending the money when gone so no lasting inflation.

Fed rate was already low under Trump.

 

“combined effects of all fiscal measures in 2020 and 2021”

I don’t disagree with your post at all. It clearly played a role. But who was president in 2020?

So wild that GOP voters want to lay the blame for this solely on Biden when Trump was directly responsible for more than half of it.

 

My post wasn’t about which President to blame but to refute it was all supply chain issues.
Sure we spent tons under Trump during covid, CARES act was thrown together it under the circumstances would you have done something different?

Mind you my link was before the “Inflation reduction act” Which nobody thinks did anything to curb inflation.

Do you agree that Government spending stimulates the economy?
If so does a stimulated economy increase or decrease inflation?

 

Does the money vanish after it’s spent somehow?
Ever hear of the multiplier effect?
I hear about it all the time when people support Gov spending.
I guess you don’t believe in that either then?

 

Inflation is transitory, it’s in your mind. If you stop thinking about it, then it doesn’t exist.

 

Yes stimulus drives inflation. And both Trump and Biden were responsible for that stimulus.

 

that’s covid, bro.

 

And to top it all off, the revised jobs reports that only 175K jobs were added in April of 2024... far less that originally reported.

 

The 175k WAS the April number. They expected 240k, so it came in below expectations.

March was revised up (+12k) to 315,000.

FEB was revised down (-36k) to 236k.