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morning chart.
in the coming months inflation will likely pick up substantially -- big fiscal packages work! even so, average inflation since last January will remain below the Fed's new 2% **average** inflation target.
note: shaded area is my forecast.
in the coming months inflation will likely pick up substantially -- big fiscal packages work! even so, average inflation since last January will remain below the Fed's new 2% **average** inflation target.
note: shaded area is my forecast.
even after 3 months of inflation over 3%, the Fed would not have reached its target average. we need substantial "reflation" to get prices back on track.
brave new world for the Fed!! keep in mind, some higher inflation = sign of healthier economy. that's good. we need it.
brave new world for the Fed!! keep in mind, some higher inflation = sign of healthier economy. that's good. we need it.
however, if inflation does not step down in the fall, or keeps picking up. the Fed will likely step in and raise rates. watch the **average** not the monthly releases.
the Fed will be watching the data very carefully. as the world changes, they will change their policy. fast.
the Fed will be watching the data very carefully. as the world changes, they will change their policy. fast.
this spring will be the ultimate test for the Fed. if they get months of 12-month change above 3%, the hawks are going to lose their shit (technical macro term). even I might need a stiff drink (after work hours).
going to bat for a rapid recovery **for all** is worth it.
going to bat for a rapid recovery **for all** is worth it.
inspiration to make a chart (and not clean my house) was a piece by @JayCShambaugh https://www.brookings.edu/blog/up-front/2021/04/08/dont-overreact-to-inflation-data-this-spring/
and one by @rortybomb @JWMason1 and Lauren Melodia https://rooseveltinstitute.org/2021/04/08/the-illusion-of-inflation-why-this-springs-numbers-will-look-artificially-high/
after a nasty fight with the hawks recently -- what an odd team this time -- I am going on the offensive. reminding them of the Fed's new target -- developed after years of review pre-Covid.
and I continue to chip away at potential output. see me here: https://www.bloomberg.com/opinion/articles/2021-04-09/fears-of-running-the-economy-too-hot-ignore-race?sref=YAR8Qcu4
and I continue to chip away at potential output. see me here: https://www.bloomberg.com/opinion/articles/2021-04-09/fears-of-running-the-economy-too-hot-ignore-race?sref=YAR8Qcu4
