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Huh? Inflation has been ramping up FAR in advance of the Ukraine invasion. Producer costs were already spiraling so badly that Powell had to concede that the en
by caeril 5y ago
Huh? Inflation has been ramping up FAR in advance of the Ukraine invasion. Producer costs were already spiraling so badly that Powell had to concede that the entire FRB was bullshitting us about inflation being "transitory" in the middle of last year.
Hayekian acolytes and hard money advocates have been warning about this on this very site for YEARS, only to be downvoted and shouted down by the dominant Keynesian Central Bank Worshipper HN zeitgeist.
No, these consequences have been in the making since Helicopter Ben launched QE. The supply chain shocks introduced by COVID definitely accelerated things, but the outcome was always inevitable.
Furthermore, the March print only included a small portion of the Ukraine-related inflation, specifically in fuel prices only. It's going to take several quarters for these high energy costs to filter into the rest of the CPI. So if you think this March print is bad, just wait.
- arcticbull 5y ago> Huh? Inflation has been ramping up FAR in advance of the Ukraine invasion. Exiting COVID, lots of demand chasing limited supply, shipping issues, supply chain issues - especially for core inputs like silicon wafers. However, that was well on its way to being resolved, which is what you see in the CPI data in spite of the Russian war. +0.3% MoM vs expected +0.5% MoM. The worst is well behind us. Lumber is way down, corn is flat, soy is flat, consumer discretionary inventories (excluding auto) are up and there's word that demand for chips has peaked too. > No, these consequences have been in the making since Helicopter Ben launched QE. The impact from QE is limited compared to all the above. There's a ton of demand for dollars, not just domestically but internationally. Monetary policy has some, small, impact, but nothing compared to the war, supply chains, shipping issues and labor market issues.
- adventured 5y ago> The worst is well behind us. How can you accurately predict that the worst is behind us, when you don't know the outcome of the Covid tornado wreaking havoc in China? You can correctly forecast how that's going to play out and how it'll impact manufacturing and consumer prices globally? Of course not, nobody can.
- arcticbull 5y agoNobody can predict anything with 100% certainty however they can infer with constant externalities based on trends.
- louloulou 5y agoCPI: 8.9% Fed funds rate: 0.5% US gov debt: 125% GDP HN: the problem is COVID/Putin, there is nothing the WH or the Fed can do.
- harambae 5y agoTo be fair, there are people in this thread making the opposite argument as well.