All the data so far is showing inflation isn't going away, and is making things tough on the Fed

Key Points

  • Commerce Department indexes that the Fed relies on heavily for inflation signals showed prices continuing to climb at a rate still considerably higher than the 2% annual goal.
  • The stubborn inflation data raised several ominous specters, namely that the Fed may have to keep rates elevated for longer or even have to hike at some point.
  • Thus far, the economy has managed to avoid broader damage from the inflation problem, though there are some notable cracks.
guyrocket,
guyrocket avatar

Very puzzling to me that anyone is blaming government spending for inflation. Is that just a corporate scapegoat?

chicken,

No, new money entering the economy comes from the government and government spending is one of the ways that happens.

RustyEarthfire,

It’s a long-standing observation of economists that government spending leads to inflation. Probably the simplest model is that the government is increasing demand without increasing supply.

Note that in this model, taxes have a deflationary impact because they reduce demand from individuals.

This is not an opinion on how much government spending is affecting current inflation (nor how much inflation is to blame for any particular category of goods).

the_post_of_tom_joad,

Cmon… Break already…

Orbituary,
@Orbituary@lemmy.world avatar

Why would companies voluntarily reduce their prices when they’re making record profits? They’ll squeeze us until we’re dry.

intensely_human,

To take market share from other companies and make even more profits?

Garbanzo,

What other companies? There’s just a handful of conglomerates and a few defacto monopolies who all stay out of each other’s lanes. Where they should be competing, they colude. We need to elect some trust busters but we keep being told our only options are keep things the same or burn it all down.

intensely_human,

What are some products you think are surrounded by this kind of market right now?

Garbanzo,

images.app.goo.gl/VuKLsWHSu8qxqvzt6

intensely_human,

I’m seeing ten root nodes in that structure. Are you claiming that ten distinct market competitors are able to maintain a pricing cartel without any defection? That seems unlikely to me.

Garbanzo,

And yet the prices continue to rise, the corps are bringing in record profits, and the fed’s best efforts have only slightly slowed the upward push on prices. Think that’s just a coincidence?

surewhynotlem,

Monetary policy that worked historically did so I’m an environment where monopolies and oligopolies were broken up to prevent price gouging.

OpticalMoose,
@OpticalMoose@discuss.tchncs.de avatar

And they were taxed enough to keep them from getting “too big to fail”.

DragonTypeWyvern,

They also didn’t have the fucking Internet and algorithmic price fixing that spreads throughout the market immediately.

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