Uusi normaali vai pysyvä häiriö - inflaatio, elvytys ja talouskasvu

Osakkeet Ylätason sijoituskeskustelu
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Taitaa olla FED ja Powell vaikean manööverin edessä - liian vähän ja liian myöhään lienee tulossa inflaation taltuttamiseen toimia?

Saattaa olla edessä yhä kiihtyvä inflaatio ja taloustaantuma, toivottavasti ei pitkä lama…

December 14, 2021 06:19 p.m. EST

The Fed­eral Open Mar­ket Com­mit­tee (FOMC) is meet­ing this week, and its mem­bers were greeted Tues­day with the rude wel­come of surg­ing whole­sale prices. This is more ev­i­dence that Chair-man Jerome Pow­ell and the Fed­eral Re­serve have made a his­toric mis­take that they now have to fix with­out send­ing the econ­omy into re­ces­sion.

Prices for fi­nal goods in­creased 9.6% year-on-year in No­vember, up from 8.8% in Oc­to­ber. The nearby chart shows how whole­sale prices have risen every month but one this year on an an­nual ba­sis, and across most ma­jor goods and ser­vices. Pro­ducer prices tend to flow into con­sumer prices, which were up 6.8% year-on-year in No­vember.

This is the re­sult of fis­cal and mon­e­tary mis­takes Con­gress and the White House spurred a sup­ply-de­mand eco­nomic mis-match with a need­less $1.9 tril­lion spend­ing bill in March, which fol­lowed record spend­ing in 2020. The Fed’s blun­der was to main­tain emer­gency mon­e­tary poli­cies long af­ter the Covid eco­nomic cri­sis had passed. This has also spurred ex­cess de­mand and an as­set-price surge as in­vestors hunt for yield amid near-zero in­ter­est rates.

This in­fla­tion is also a mon­u­men­tal re­buke to the Fed’s new pol­icy frame-work an­nounced in Au-gust 2020. The Fed aban-doned its pre­vi­ous 2% in­fla­tion tar­get and in-stead shifted to a “flex­i­ble av­er­age in­fla­tion tar­get.” The Fed would al­low or even en­cour­age in­fla­tion to run above the 2% tar­get to make up for pe­ri­ods when it was be­low 2%. In prac­ti­cal terms, this meant that the Fed wouldn’t move to pre-empt in­fla­tion but would wait un­til it ap­peared and was sus­tained be­fore tight­en­ing money. Well, it has got that in­fla­tion, and more.

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