To Inflate Or Not To Inflate, That Is The Question.

arakboss · May 9, 2023

The general consensus, summed up in this article is that we need to suffer now so we can suffer less later.

https://www.cnn.com/2023/05/08/investing/premarket-stocks-trading/index.html

Anybody here believe there is another way out of the inflation problem that doesn't involve job losses, reduced earnings, higher borrowing rates, etc?

Richo877 · May 9, 2023

arakboss said:
The general consensus, summed up in this article is that we need to suffer now so we can suffer less later.

https://www.cnn.com/2023/05/08/investing/premarket-stocks-trading/index.html

Anybody here believe there is another way out of the inflation problem that doesn't involve job losses, reduced earnings, higher borrowing rates, etc?

Total economic collapse, reinstate the gold standard, hunt and gather, barter, cut political ties, independently self sustain, and eliminate any and all government entities that think we the people work for them.

Devneck · May 9, 2023

Richo877 said:
Total economic collapse, reinstate the gold standard, hunt and gather, barter, cut political ties, independently self sustain, and eliminate any and all government entities that think we the people work for them.

Not saying this is right or wrong, but it likely leads to a lot of death.

So maybe also add to that supporting churches, neighbors, local community and other groups with a mission to help less fortunate. Unforced of course.

bolus · May 9, 2023

Why do they let that guy talk?

"There's a sense that we're much closer to the end of this than to the beginning," Chair Jerome Powell said.

In case anyone needs a reminder:

"We may be. We may well be in a recession, but again I would point to the difference between this and a normal recession. There's nothing fundamentally wrong with our economy. Quite the contrary. The economy performed very well right through February."

Jerome Powell March 26th, 2020.
February 2020 inflation rate: 2.30%

"We're going to be patient. Expect us to wait and see and not react if we see small, and what we would view as very likely to be transient, effects on inflation."

[Speaking on Gamstop short sneeze] "I don't want to comment on a particular company or day's market activity."

Jerome Powell January 27th, 2021.
December 2020 inflation rate: 1.36%

"The correlation between different aggregates like M2 (money supply) and inflation is just very, very low, and you see that now where inflation is at 1.4% for this year."

Jerome Powell Febuary 22nd, 2021.
January 2021 inflation rate: 1.40%

"I am confident that people will reach the other side of this pandemic with the foundations of their lives intact... But the recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes... Our best view is that the effect on inflation will be neither particularly large nor persistent."

Jerome Powell March 23rd, 2021.
February 2021 inflation rate: 1.68%

"We want inflation to run a little bit higher than its been averaging in the last quarter century. We want to average 2%, not 1.7%... However, these one-time increases in prices are likely to have only transitory effects on inflation."

Jerome Powell April 28th, 2021.
March 2021 inflation rate: 2.62%

"Those who have historically been left behind stand the best chance of prospering in a strong economy... We will only reach our full potential when everyone can contribute to, and share in, the benefits of prosperity."

Jerome Powell May 3rd, 2021.
April 2021 inflation rate: 4.16%

"As these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal, and the median inflation projection falls from 3.4% this year to 2.1% next year... Our new framework for monetary policy emphasizes the importance of having well-anchored inflation expectations."

Jerome Powell June 16th, 2021.
May 2021 inflation rate: 4.99%

"These bottleneck effects have been larger than anticipated, but as these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal."

Jerome Powell July 28, 2021.
June 2021 inflation rate: 5.39%

"Many find it counterintuitive that the Fed would want to push up inflation... However, inflation that is persistently too low can pose serious risks to the economy."

Jerome Powell August 27, 2021.
July 2021 inflation rate: 5.37%

"So there are many, many different inflation measures, of course, and that's why we have this thing called the CIE, which is an index of market-based measures... if we did see them moving up in a troubling way and running persistently above levels that are really consistent without mandate, then we would certainly react to that."

Jerome Powell September 22, 2021.
August 2021 inflation rate: 5.25%

"I don't think it's time to taper. I don't think it's time to raise rates. Our policy is well-positioned to manage a range of plausible outcomes."

Jerome Powell October 22, 2021.
September 2021 inflation rate: 5.39%

"We understand the difficulties that high inflation poses for individuals and families... Let me say that what's happened, is that inflation is coming higher than expected. We see that just like everyone else does, and we see that they're now on track to persist well into next year... I do think it would be premature to raise rates today."

Jerome Powell November 3, 2021.
October 2021 inflation rate: 6.22%

"The word 'transitory' has different meanings to different people. It's a confusing word that needs to be retired."

Jerome Powell November 30th, 2021.
October 2021 inflation rate: 6.22%

"We're always just going to do what we think is right for the economy and for the people we serve."

Jerome Powell December 15th, 2021.
November 2021 inflation rate: 6.81%

"The old system was in place for decades and then suddenly it was revealed as insufficient... We do take the need to protect our credibility with the public very seriously."

[Commenting on the Federal Reserve trade scandel of 2020] "We've really made a complete change in the way we govern purchases and sales of securities... There will be no ability to time the market."

Jerome Powell January 11th, 2022.
December 2021 inflation rate: 7.04%

"I'd say that the inflation situation is about the same or slightly worse... It hasn't gotten better and that's been the pattern... What we're learning is it's just taking much longer, and that raises the risk that high inflation will be more persistent."

Jerome Powell January 26th, 2022.
December 2021 inflation rate: 7.04%

Jerome Powell was re-elected as Chairman of the Federal Reserve System.

Jerome Powell February of 2022.
January 2022 inflation rate: 7.48%

"The inflation that we are experiencing is just nothing that we have experienced in decades... All the things we did during the pandemic, we turned our dials as hard as we could... Part of what we did and what Congress did is the reason why inflation is so high."

Jerome Powell March 2nd, 2022.
February 2022 inflation rate: 7.87%

"These higher prices have real effects on people's well-being and it takes a toll on everyone. If you're at the lower end of the income spectrum it's very hard because you are spending most of your money on necessities, but it's punishing for everyone... We can't blame the framework. It was a sudden, unexpected burst of inflation and then it was the reaction to it, and it was what it was."

Jerome Powell March 16th, 2022.
February 2022 inflation rate: 7.87%

"The rise in inflation has been much greater and more persistent than forecasters generally expected... We're not expecting near-term progress on inflation."

Jerome Powell March 21st, 2022.
February 2022 inflation rate: 7.87%

"It is appropriate in my view to be moving a little more quickly... We had an expectation that inflation would peak around this time and then come down over the course of the rest of the year. These expectations have been disappointing in the past and now we want to see actual progress... Are we going back to the old economy? Probably not. What's the new one going to look like?"

Jerome Powell April 21st, 2022.
March 2022 inflation rate: 8.54%

"We have a good chance at a soft or softish landing... There's a false precision in the discussion that we as policymakers don't really feel... the economy is doing fairly well... I think we have a good chance to restore price stability without a recession."

Jerome Powell May 4th, 2022.
April 2022 inflation rate: 8.26%

"I have said, and I will say it again, if you had perfect hindsight, you'd go back and it probably would have been better for us to have raised rates a little sooner... So the question whether we can execute a soft landing or not, it may actually depend on factors that we don't control."

Jerome Powell May 12th, 2022.
April 2022 inflation rate: 8.26%

"We all read the inflation reports very carefully, and look for details that look positive, but truthfully, this is not the time for tremendously-nuanced readings of inflation... Sometimes the landing is just perfect, sometimes it's a little bumpy. It's still a good landing, you don't even notice it... There could be some pain involved in restoring price stability, but we think we can sustain a strong labor market."

Jerome Powell May 17th, 2022.
April 2022 inflation rate: 8.26%

"Expectations are still in a place where short-term inflation is going to be high but comes down sharply over the next couple of years... If we even see a couple of indicators that bring that into question we take that very seriously, we do not take this for granted."

"3.6% (unemployment rate) is historically low, so a 4.1% unemployment rate with inflation well on its way to 2% I think that would be a successful outcome. We're not looking to have a higher unemployment rate, but I would certainly look at that as a successful outcome."

"We're not trying to induce a recession now, let's be clear on that. We're trying to achieve 2% inflation and a consistently strong labor market."

"We've been expecting progress and we didn't get that, we got sort of the opposite."

"We're looking at the retail sale, big store numbers, and that kind of thing, but I think the fair summary of what we see is you see continuing shifts in consumption. You see some sales going down, but overall spending is very strong and consumers are in really good shape financially, they're spending, there's no sign of a broader slow down in the economy. People are talking about it a lot, consumer confidence is very low and that's probably related to gas price, and also just stock prices to an extent for other people."

"It does appear that the U.S. economy is in a strong position and well-positioned to deal with higher interest rates."

"The worst mistake we could make would be to fail, and that's not an option. We have to restore price stability because it's the bedrock of the economy. If you don't have price stability the economy isn't going to work the way it's supposed to. It won't work for people, wages will be eaten up. So we want to get the job done. This inflation happened relatively recently. We don't think it's affecting expectations in any kind of fundamental way."

"We think that the public generally sees us as very likely to be successful at getting inflation down to 2%."

Jerome Powell June 15th, 2022.
May 2022 inflation rate: 8.60%

"The American economy is very strong and well-positioned to handle tighter monetary policy... It is a possibility our rate rises could cause a recession... We're not trying to provoke and don't think that we will need to provoke a recession."

Jerome Powell June 22nd, 2022.
May 2022 inflation rate: 8.60%

"During the summer months of 2021, inflation was coming down month-by-month. So that told us that our thesis that this was going to be a passing inflation shock was at least plausible... We did underestimate it, we clearly did."

Jerome Powell June 23rd, 2022.
May 2022 inflation rate: 8.60%

"We now understand better how little we understand about inflation. This was unpredicted... We fully appreciate the pain people are going through."

Jerome Powell June 29th, 2022.
May 2022 inflation rate: 8.60%

"I do not think the U.S. is currently in a recession... We're trying to do just the right amount. We're not trying to have a recession... These are not normal times. There's significantly more uncertainty now about the path ahead than, I think, there ordinarily is and, ordinarily, it's quite high.... We're trying to not to make a mistake."

Jerome Powell July 27th, 2022.
June 2022 inflation rate: 9.10%

"While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation... While the latest economic data has been mixed, in my view, our economy continues to show strong underlying momentum."

Jerome Powell August 26th, 2022.
July 2022 inflation rate: 8.50%

"We have got to get inflation behind us, I wish there were a painless way to do that. There isn't... Our expectation has been we would begin to see inflation come down, largely because of supply side healing, we haven't. We have seen some supply side healing but inflation has not really come down... I think that shelter inflation is going to remain high for some time. We're looking for it to come down, but it's not exactly clear when that will happen."

Jerome Powell September 21st, 2022.
August 2022 inflation rate: 8.30%

"I'm pleased that we have moved as fast as we have, I don't think we have over-tightened... We're now 18 months into this episode of high inflation, and we don't have a clearly indentified, scientific way of understanding at what point inflation becomes entrenched. If we were to over-tighten, we could then use our tools strongly to support the economy, where as if we don't get inflation under control now we are in a situation were inflation will become entrenched... I think no one knows whether there's going to be a recession or not. And if so, how bad that recession would be."

Jerome Powell November 2nd, 2022.
October 2022 inflation rate: 7.7%

"The time for moderating the pace of rate increases may come as soon as the December meeting... I do continue to believe that there's a path to a soft or softish landing... History cautions strongly against prematurely loosening policy. We will stay the course until the job is done... By any standard, inflation is much too high."

Jerome Powell November 30th, 2022.
October 2022 inflation rate 7.7%

"It was very important to move quickly. The pace with which we're moving was the most important thing... I don't think anyone knows. Whether we're gonna have a recession or not and if we do, whether it's going to be a deep one or not... The kind of thing that had to happen when inflation really got out of control and the Fed didn't respond aggressively enough or soon enough in a prior episode, you know, 50 years ago. So that's really the worst pain would be if we failed to act."

Jerome Powell December 14th, 2022.
November 2022 inflation rate 7.1%

"Restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy."

Jerome Powell January 10th, 2023.
December 2022 inflation rate: 6.5%

"We can now say, I think for the first time, that the disinflationary process has started... I still think there is a path to getting inflation down to 2 percent without a significant economic decline."

Jerome Powell Febuary 2nd, 2023.
January 2023 inflation rate: 6.4%

"My colleagues and I are acutely aware that high inflation is causing significant hardship, and we're strongly committed to returning inflation to our 2% goal... The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher that previously anticipated."

Jerome Powell March 7th, 2023.
February 2023 inflation rate: 6.0%

"Our banking system is sound and resilient with strong capital and liquidity... All depositors' savings in the banking system are safe... We're committed to learning the lessons from this episode and to work to prevent events like this from happening again."

Jerome Powell March 22nd, 2023.
February 2023 inflation rate: 6.0%

bolus · May 10, 2023

Thank goodness they changed the CPI calculation so it looks like it is only 4.9% today. That's one way to handle it. If you cant make inflation better and you need to save the banks, just change the CPI number.

So remember if you exclude what ever you pay for mortgage or rent, and you havent had a 20% raise in the last 3 years you have lost money.

Watch the media and good old Jerome report on how much better the CPI is.

First result for a search:

"inflation cooled" "below analyst expectations" "lowest since 2021"

See, the narative was ready to go..... Everything is fine. BACK TO WORK YOU SLAVES!!

Inflation Cools But 'Funny' CPI Number Likely Means Fed Will Hike Rates Again

arakboss · May 11, 2023

Not raising the debt ceiling seems like it could help do the Feds work of taming inflation.

https://www.cnn.com/2023/05/10/economy/debt-ceiling-layoffs/index.html

Alexx1401 · May 11, 2023

arakboss said:
Not raising the debt ceiling seems like it could help do the Feds work of taming inflation.

https://www.cnn.com/2023/05/10/economy/debt-ceiling-layoffs/index.html

Sadly that is not going to happen. The printing of money is used to buy votes. So they are not going to stop printing money until or unless we have a complete crash.

arakboss · May 11, 2023

Alexx1401 said:
Sadly that is not going to happen. The printing of money is used to buy votes. So they are not going to stop printing money until or unless we have a complete crash.

100 trillion, here we come.