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No, I think it will likely be over by then, because the era of easy money is ending: > If [St. Louis Federal Reserve President James] Bullard has his way, the

No, I think it will likely be over by then, because the era of easy money is ending: > If [St. Louis Federal Reserve President James] Bullard has his way, the rate will continue rising to a range of 3.75%-4% by the end of the year. After starting 2022 near zero, the rate has now come up to a range of 2.25%-2.5%.[1] While at the same time, fiscal policy is tightening. The "slightly" overgenerous Covid aid is over and the President is likely to get only a fraction of his $3.5 trillion dollar dream program. And eventually OPEC will probably increase oil production, as Biden asked them to [2]; or Biden will change his stance on increasing US production. (BTW, Russia hasn't been removed from the market. Their exports have only fallen about 15% since the invasion [3], which is easily compensated for. The fact that producers haven't increased production has a lot to do with Biden.) But a return to sound fiscal policy and practical oil policy won't reverse the damage of two years of inflation and slow or negative growth. 1: https://www.cnbc.com/2022/08/03/feds-bullard-sees-more-interest-rate-hikes-ahead-and-no-us-recession.html https://www.cnbc.com/2022/08/03/feds-bullard-sees-more-inter... 2: https://www.cnn.com/2022/08/03/energy/joe-biden-saudi-trip-opec-analysis/index.html https://www.cnn.com/2022/08/03/energy/joe-biden-saudi-trip-o... 3: https://oilprice.com/Latest-Energy-News/World-News/Russian-Oil-Exports-Have-Stabilized-Revenues-Steady.html https://oilprice.com/Latest-Energy-News/World-News/Russian-O...

ajross 4y ago
> I think it will likely be over by then So... you agree it's transitory? Why jump in to argue the opposite then? This sounds a little like a strawman, where you pretend that the "other side" meant "transitory" in the sense of weeks instead of a year or two. And no one did. > won't reverse the damage of two years of inflation And this is a misconception. Inflation isn't "damage", it's just a change in units. By definition (!), inflation numbers represent no change in total value of assets as a percent of macro numbers like GDP.[1] Your argument seems like it's deliberately trying to conflate the idea of inflation with "recession", when that's simply not correct. [1] It's true that there is some disruption and relative movement of assets, though. If you're a bank who's written a bunch of dollar-denominated loans, inflation is very bad for you. If you're a credit card user carrying a balance, it's good. On the whole inflation represents a net transfer of wealth from loaners to borrowers, and in the modern US that's actually not entirely a bad thing.
- leereeves 4y ago
  > So... you agree it's transitory? No, transitory implies that it would go away on its own, without action by the government. I think it's going to end because the policies that I think caused it have ended. If the policies that were in place when it was first called transitory were still in place, then I would take the bet. > Inflation isn't "damage" I was referring to the decline in real wages, sky high house prices pricing out the working class, things like that. Not inflation per se.

ajross 4y ago

> I think it will likely be over by then So... you agree it's transitory? Why jump in to argue the opposite then? This sounds a little like a strawman, where you pretend that the "other side" meant "transitory" in the sense of weeks instead of a year or two. And no one did. > won't reverse the damage of two years of inflation And this is a misconception. Inflation isn't "damage", it's just a change in units. By definition (!), inflation numbers represent no change in total value of assets as a percent of macro numbers like GDP.[1] Your argument seems like it's deliberately trying to conflate the idea of inflation with "recession", when that's simply not correct. [1] It's true that there is some disruption and relative movement of assets, though. If you're a bank who's written a bunch of dollar-denominated loans, inflation is very bad for you. If you're a credit card user carrying a balance, it's good. On the whole inflation represents a net transfer of wealth from loaners to borrowers, and in the modern US that's actually not entirely a bad thing.

leereeves 4y ago
> So... you agree it's transitory? No, transitory implies that it would go away on its own, without action by the government. I think it's going to end because the policies that I think caused it have ended. If the policies that were in place when it was first called transitory were still in place, then I would take the bet. > Inflation isn't "damage" I was referring to the decline in real wages, sky high house prices pricing out the working class, things like that. Not inflation per se.