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Inflation is likely to get much worse. The Fed put
Posted on: February 16, 2022 at 11:50:20 CT
JeffB MU
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themselves and all of us between a rock and a hard place. Of course our federal government has thrown plenty of fuel on the fire themselves.
Inflation is obviously climbing rapidly and is likely to accelerate even more, but the only way to stop it from going out of control is to raise interest rates and start reducing the astronomically large balance sheet they have accumulated and that would throw the economy into a huge recession or depression when this bubble of all bubbles pops.
If CPI inflation is 7.5% and climbing, and the PPI as you noted is 9.7% the Fed would need to raise interest rates far above the 1% increase many are already fretting over. The last time they tried raising rates the economy started to falter and they quickly reversed course, not able to take the pain.
But if they don't let interest rates flow to where investors can at least tread water eg. maintain the purchasing power of their investment, then people will be incentivized to hurry up and buy assets now rather than wait for the value of the dollar to continue to drop faster than any interest they can earn. But if they raise interest rates to say 8% we will be in a world of hurt just before the mid-term elections.
More than likely they will continue to try and stem the rising tide, or tsunami as the case may be, with rate hikes that are too little and too late.
http://themostimportantnews.com/archives/5-new-numbers-that-prove-that-americas-horrifying-inflation-crisis-is-getting-even-worse
Inflation is obviously climbing rapidly and is likely to accelerate even more, but the only way to stop it from going out of control is to raise interest rates and start reducing the astronomically large balance sheet they have accumulated and that would throw the economy into a huge recession or depression when this bubble of all bubbles pops.
If CPI inflation is 7.5% and climbing, and the PPI as you noted is 9.7% the Fed would need to raise interest rates far above the 1% increase many are already fretting over. The last time they tried raising rates the economy started to falter and they quickly reversed course, not able to take the pain.
But if they don't let interest rates flow to where investors can at least tread water eg. maintain the purchasing power of their investment, then people will be incentivized to hurry up and buy assets now rather than wait for the value of the dollar to continue to drop faster than any interest they can earn. But if they raise interest rates to say 8% we will be in a world of hurt just before the mid-term elections.
More than likely they will continue to try and stem the rising tide, or tsunami as the case may be, with rate hikes that are too little and too late.
http://themostimportantnews.com/archives/5-new-numbers-that-prove-that-americas-horrifying-inflation-crisis-is-getting-even-worse
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Inflation is likely to get much worse. The Fed put - JeffB MU - 2/16 11:50:20