Food, energy and shelter are 50% of the CPI, 50% of the typical family's budget. That's up 10.5% year over year. So the American public is not going to tolerate this inflation, and the Fed knows that. They're going to continue on their course;for sure at the next meeting. And the future is, I love this term, messy, there's no question about it.
After stocks plunged following the August CPI report, a"Mornings with Maria" market panel warned of a"messy" economic future on Tuesday, September 13, 2022. The Fed needs to see less job growth. It needs to see fewer job openings. It needs to see fewer houses built, needs to have slower growth in retail sales. All of that is bad news for the average American, for the average business. And the only question is whether they will go too far.
And given the way they operate, which is to look at actual inflation and see it actually come down, they are operating with a backward-looking rule of thumb, and they are going to of fighting this inflation. The only question is when we see the downturn, is it late this year or early next year? But it will happen.
'Messy' is an interesting choice of words...not exactly sure that truly captures the sh*t show that is taking place...
It’s going to be a long, painful haul to undo the Covid stimulus and supply chain disruptions, and contraction in commercial real estate will only exacerbate the coming crashes… totally different situation from 2008 or 2001 bear markets…
Like it was any better yesterday. Clown armchair economists see gas prices down $2 and think it means inflation is gone.