Wholesale prices up 0.4% for month, 8.5% for year

So, I had to calc it by hand. The correlation between inflation & real rates is .02 & insignificant. So, that means, at least over this time period, there is not a relationship between inf & real rates.

I am genuinely curious. Why did you think there would be a relation between real rates & inf? There obv is a very tight one between nominal rates & inf, & to be honest, that is why I think you thought there was 1 between real & inf. Neither here nor there, but I think it is interesting that real rates have been falling for centuries.

BTW, I found an Econ paper that posits a theoretical model that predicts a negative relationship between inf & real rates. I think it was meant to explain weird periods like the 1970s.

As I stated in my post above, expectations of inf can cause real rates to rise. I suspect there are times when expectations of inf are a + function of current inflation, esp if inflation has persisted for some time & hence inf -> expectations of more inf in the future -> higher real rates now. (pro tip. you should use my ans)

 

You never answered my question: are you one of those “national debt doesn’t matter” people? It’s okay if you are. It would explain a lot, however. I don’t need the wonky math equations. The graph clearly shows borrowing costs at their 60 year zenith following the highest 6-year total of inflation. You’re just spinning the data to keep the narrative in tact.

Where do you think real rates will be once inflation is dented after all the hiking the Fed is doing now? The same thing will occur. There will be a significant delta between nominal rates and the inflation rate for some time until the Fed begins cutting in earnest. Higher borrowing costs.

 

No. I am not one of those national debt does not matter people at all (you may have me confused with Reagan). I am for cutting tons of gov.

You did not ans my question. Why do you think inf makes real rates higher?

Q2. Why would you think I don't care about the debt? pretty sure I am the only fiscal con on this board.

Q3. What narrative are you talking about? I clearly stated that the cost of borrowing MAY go up. I was simply pointing out that the net = the effect on borrowing cost + the insta reduction in the real value of debt (which you concur with).

 

I’ve already answered that question. Your own data supports this very idea. You did all the research for me and I can’t thank you enough for that. Saved me a little time.