Jon Hartley of the Foundation for Research on Equal Opportunity writes about inflation expectations:
In his most recent Federal Open Market Committee (FOMC) press conference, Fed chairman Jerome Powell said the latest jump in the monthly University of Michigan inflation expectations data was “quite eye-catching and we noticed that.” This followed the FOMC’s decision to raise the federal funds rate by 0.75 percent, rather than 0.5 percent, on the heels of the latest CPI inflation data (which showed core inflation prices to be sustainably rising in a month-over-month basis in areas such as housing).
While I’ve warned since early 2021 that inflation could be on the rise following copious amounts of fiscal stimulus in the form of social transfers, the rise in long-term inflation expectations is a new development that should be particularly concerning for those following the New Great Inflation.
The “Do Something!” imperative so common in the Beltway as a response to the headlines of the day yields economic or policy improvement only rarely if at all. This cannot be surprising in that this imperative by its very nature does not lend itself to thoughtfulness, even by the standards of federal policy-making. One of the latest manifestations of this is the current effort to enact “NOPEC” legislation — No Oil Producing and Exporting Cartels Act — that would empower the Department of Justice to sue the Organization of the Petroleum Exporting Countries on antitrust grounds, as a purported response to high fuel prices.
On the 73rd episode of the Capital Record, David Bahnsen is joined by Will Swaim of the Radio Free California podcast. Listen here or wherever you get your podcasts.