5 ms·

Maybe, but I think some of it is just luck. Supply chain issues are starting to soften, finally. It all feels to me like we're still dealing with COVID bullwhip

Maybe, but I think some of it is just luck. Supply chain issues are starting to soften, finally. It all feels to me like we're still dealing with COVID bullwhip issues/echoes. The Fed has just been trying to manage the wave.

jeromegv 4y ago
Alot of people have been predicting that this inflation was driven by supply chain problems and not by printing money. I don't have enough information to give my opinion either way, but if indeed inflation is going back down, this wasn't luck, this was what they many were banking on.
- throw0101a 4y ago
  > Alot of people have been predicting that this inflation was driven by supply chain problems and not by printing money. The SF Fed looked at this: * https://www.frbsf.org/economic-research/publications/economic-letter/2022/june/how-much-do-supply-and-demand-drive-inflation/ https://www.frbsf.org/economic-research/publications/economi... About one-third seems to be demand-driven: * https://www.reuters.com/markets/us/demand-issues-account-one-third-us-inflation-spike-sf-fed-2022-06-21/ https://www.reuters.com/markets/us/demand-issues-account-one...
  - paulmd 4y ago
    > About one-third seems to be demand-driven: if inflation were 1/3 of its current level, would that be considered an unusual or concerning level? It doesn't seem like it, I think that would be an acceptable level, but hey, not an economist (not that it's a hard science field or anything).
- deleted 4y ago
  [deleted]
- mgfist 4y ago
  When people said inflation was transitory, they didn't realize that the transitory period could mean a few years. For "money printing" to have an effect on inflation, the money has to actually be circulating in the system. Most of the money printing people talk about, with the exception of the big fiscal policy responses(stimulus, ppp) is just number shuffling between balance sheets. It doesn't really mean much to the real world.
- pydry 4y ago
  It's clearly a combination of factors. War, post covid supply chain fractures and money printing all played a significant part it's just a question of how much.
curiousllama 4y ago
Yes, and - “managing the wave” that well is really hard. I didn’t think we’d be able to do it. If we do, it suggests we know something, at least, about monetary policy.
hervature 4y ago
I think you are being very semiconductor focused if you describe it as "starting to soften". Lumber, copper, and meats are all at pre-pandemic prices and key drivers of inflation. Even some electronics categories (cameras) are dropping significantly which is why I think you said "starting". In my opinion, gas/oil/petroleum is the last thing keeping inflation up. If gas drops by 20-30%, things like plastics, cement, and anything that requires transport (food) will return to pre-pandemic levels as well. Some people will blame the war but the clear driver of all of this is Biden signalling to domestic producers that they will face hostility. The stopping of new oil production didn't move the needle itself but rather that CAPEX definitely was reduced which meant recovering production levels has taken longer than it should have.
- selimthegrim 4y ago
  How is Manchin’s carve out for new leasing hostility? Anything short of bending over for them is hostility?
  - hervature 4y ago
    Do you think oil magically starts flowing once a human signs a piece of paper? It takes time, the impacts of the last decision are being felt now 2 years after the fact and the impacts of this decision will take 2 years. We are reaping what was sown 2 years ago and it was entirely predictable and the whole point of the policy of banning new leases was to make oil more expensive to expedite green energy adoption as it becomes more economically viable. It is pretty clear Biden is still signalling that these concessions are temporary and that, if inflation is curbed, will go back to being hard on oil. Like I said, this signaling is more powerful than the actual policy because it prevents investment as the ROI is too risky.
    - pwinnski 4y ago
      Do you think there has been fewer permits issued under Biden? Because there haven't[0]. There were many thousands of existing leases not being developed[1], and now a record number of permits--both in percentage terms and as raw numbers--have been issued under Biden. Turn off the political info and look at the reality: this is not, and has not been, a domestic leasing issue. The Russian invasion of Ukraine has really been as catastrophic for oil prices as people have been saying, which is why this is a worldwide problem, not just a US problem. 0. https://news.yahoo.com/us-oil-and-gas-permitting-has-increased-under-biden-data-show-223504727.html https://news.yahoo.com/us-oil-and-gas-permitting-has-increas... 1. https://news.yahoo.com/fact-checking-biden-claim-9-170008791.html https://news.yahoo.com/fact-checking-biden-claim-9-170008791...
deleted 4y ago
[deleted]
TaylorAlexander 4y ago
This is a tangent (not directly related to your comment) but I find it funny that whoever is in office, their political opponents will blame a poor economy on them (even if the issue is global), but if things do improve, whether the administration is responsible or not, those blaming the problems on them will suddenly have to change course and say it didn't have anything to do with the administration!
tablespoon 4y ago
> Maybe, but I think some of it is just luck. Supply chain issues are starting to soften, finally. It all feels to me like we're still dealing with COVID bullwhip issues/echoes. The Fed has just been trying to manage the wave. Weren't the high gas prices specifically fallout from the Ukraine-war? Is this an indication that the sanctions against Russia aren't working (e.g. they've had enough time to adjust to exporting to China/India, and their previous customers have had time to start importing more from the places China/India stopped importing from). Is inflation falling in other areas?

jeromegv 4y ago

Alot of people have been predicting that this inflation was driven by supply chain problems and not by printing money. I don't have enough information to give my opinion either way, but if indeed inflation is going back down, this wasn't luck, this was what they many were banking on.

throw0101a 4y ago
> Alot of people have been predicting that this inflation was driven by supply chain problems and not by printing money. The SF Fed looked at this: * https://www.frbsf.org/economic-research/publications/economic-letter/2022/june/how-much-do-supply-and-demand-drive-inflation/ https://www.frbsf.org/economic-research/publications/economi... About one-third seems to be demand-driven: * https://www.reuters.com/markets/us/demand-issues-account-one-third-us-inflation-spike-sf-fed-2022-06-21/ https://www.reuters.com/markets/us/demand-issues-account-one...
- paulmd 4y ago
  > About one-third seems to be demand-driven: if inflation were 1/3 of its current level, would that be considered an unusual or concerning level? It doesn't seem like it, I think that would be an acceptable level, but hey, not an economist (not that it's a hard science field or anything).
deleted 4y ago
[deleted]
mgfist 4y ago
When people said inflation was transitory, they didn't realize that the transitory period could mean a few years. For "money printing" to have an effect on inflation, the money has to actually be circulating in the system. Most of the money printing people talk about, with the exception of the big fiscal policy responses(stimulus, ppp) is just number shuffling between balance sheets. It doesn't really mean much to the real world.
pydry 4y ago
It's clearly a combination of factors. War, post covid supply chain fractures and money printing all played a significant part it's just a question of how much.

curiousllama 4y ago

Yes, and - “managing the wave” that well is really hard. I didn’t think we’d be able to do it. If we do, it suggests we know something, at least, about monetary policy.

hervature 4y ago

I think you are being very semiconductor focused if you describe it as "starting to soften". Lumber, copper, and meats are all at pre-pandemic prices and key drivers of inflation. Even some electronics categories (cameras) are dropping significantly which is why I think you said "starting". In my opinion, gas/oil/petroleum is the last thing keeping inflation up. If gas drops by 20-30%, things like plastics, cement, and anything that requires transport (food) will return to pre-pandemic levels as well. Some people will blame the war but the clear driver of all of this is Biden signalling to domestic producers that they will face hostility. The stopping of new oil production didn't move the needle itself but rather that CAPEX definitely was reduced which meant recovering production levels has taken longer than it should have.

selimthegrim 4y ago
How is Manchin’s carve out for new leasing hostility? Anything short of bending over for them is hostility?
- hervature 4y ago
  Do you think oil magically starts flowing once a human signs a piece of paper? It takes time, the impacts of the last decision are being felt now 2 years after the fact and the impacts of this decision will take 2 years. We are reaping what was sown 2 years ago and it was entirely predictable and the whole point of the policy of banning new leases was to make oil more expensive to expedite green energy adoption as it becomes more economically viable. It is pretty clear Biden is still signalling that these concessions are temporary and that, if inflation is curbed, will go back to being hard on oil. Like I said, this signaling is more powerful than the actual policy because it prevents investment as the ROI is too risky.
  - pwinnski 4y ago
    Do you think there has been fewer permits issued under Biden? Because there haven't[0]. There were many thousands of existing leases not being developed[1], and now a record number of permits--both in percentage terms and as raw numbers--have been issued under Biden. Turn off the political info and look at the reality: this is not, and has not been, a domestic leasing issue. The Russian invasion of Ukraine has really been as catastrophic for oil prices as people have been saying, which is why this is a worldwide problem, not just a US problem. 0. https://news.yahoo.com/us-oil-and-gas-permitting-has-increased-under-biden-data-show-223504727.html https://news.yahoo.com/us-oil-and-gas-permitting-has-increas... 1. https://news.yahoo.com/fact-checking-biden-claim-9-170008791.html https://news.yahoo.com/fact-checking-biden-claim-9-170008791...

deleted 4y ago

[deleted]

TaylorAlexander 4y ago

This is a tangent (not directly related to your comment) but I find it funny that whoever is in office, their political opponents will blame a poor economy on them (even if the issue is global), but if things do improve, whether the administration is responsible or not, those blaming the problems on them will suddenly have to change course and say it didn't have anything to do with the administration!

tablespoon 4y ago

> Maybe, but I think some of it is just luck. Supply chain issues are starting to soften, finally. It all feels to me like we're still dealing with COVID bullwhip issues/echoes. The Fed has just been trying to manage the wave. Weren't the high gas prices specifically fallout from the Ukraine-war? Is this an indication that the sanctions against Russia aren't working (e.g. they've had enough time to adjust to exporting to China/India, and their previous customers have had time to start importing more from the places China/India stopped importing from). Is inflation falling in other areas?