Where is it, Chairman Powell? After spending months deliberately hyping a “flood” of digital money printing, and then unleashing average inflation targeting making Americans believe the central bank will be wickedly irresponsible when it comes to consumer prices, the evidence portrays a very different set of circumstance. Inflationary pressures were supposed to have been visible by now, seven months and [...]
There is no oil in the CPI’s consumer basket, yet oil prices largely determine the rate by which overall consumer prices are increasing (or not). WTI sets the baseline which then becomes the price of motor fuel (gasoline) becoming the energy segment. As energy goes, so do headline CPI measurements. And that’s a huge problem…if you are Jay Powell. We’ve [...]
After a record three straight months of decline for the seasonally-adjusted core CPI March through May 2020, it turned upward again in June. Buoyed by a partially reopened economy, the price discounting (prerequisite to the Big D) took at least one month off. No thanks to Jay Powell, of course, who sits on the sidelines while consumer prices (like the [...]
From a monetary policy perspective, smooth is what you are aiming for. What central bankers want in this age of expectations management is for a little bit of steady inflation. Why not zero? Because, they decided, policymakers need some margin of error. Since there is no money in monetary policy, it takes time for oblique “stimulus” signals to feed into [...]
I am no fan of John Maynard Keynes. But this isn’t to say that there is nothing worthwhile about Keynes’ work. Indeed, it is a logical fallacy that one can’t object to his conclusions while at the same time admiring some of the ways with which he arrived at them. There is a lot about what Keynes thought, and wrote, [...]
What do consumers know that Economists don’t? It’s a loaded question, of course, particularly in this day and age where Economists spend years perfecting the study of mathematics. In many ways, formal training is an impediment to analysis of the economy. There’s nothing wrong with learning about regressions, but it can and often does appear to take away from intuitive [...]
Overshadowed by the “dollar” last week was the Bureau of Labor Statistics. The BLS reported the US CPI had increased in July 2018 by the highest rate since December 2011. Running at 2.95% year-over-year, consumer prices accelerated a little from June’s pace. Not only that, the CPI’s core rate of inflation sped up to 2.35%. That was the highest since [...]
The yearlong wireless data plan nightmare is officially over. For the second month in a row, the CPI for Wireless Telephone Services, which includes any unlimited data at fixed prices, was more stable in its annual comparison. In April 2018, the index was nearly flat to April 2017; down by less than 1%. It was, for once, transitory. What that [...]
When we look back at the period known as the Great Inflation there is a tendency, I believe, to truncate the episode only to the most well-known parts. What many people remember are things like gas lines, where oil problems and embargoes left Americans at several points in the seventies too often stuck for trying fill up their autos (or [...]
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