You do not want to hit “high” records when it comes to the Consumer Price Index for All Urban Consumers (CPI-U).
Inflation hit another “high” under Biden. In the past 12 months, inflation increased 7.5%, which is the largest increase in a 12 month period since February 1982.
Everything increased during the last 12 months:
Food prices surged 7%, the sharpest rise since 1981. Restaurant prices rose by the most since the early 1980s, pushed up by an 8% jump in fast-food prices from a year earlier. Grocery prices increased 7.4%, as meat and egg prices continued to climb at double-digit rates.Energy prices rose 27%, easing from November’s peak of 33.3%. But the jump in electricity costs was particularly sharp when compared with historical trends, with prices up 10.7% from a year ago and 4.2% from December. The latter was the sharpest one-month rise since 2006.
So inflation has been above 5% in the past eight months. It’s transitory, you guys!
Let the spinning begin! We have Biden’s top economic advisor Jared Bernstein:
BERNSTEIN: “I expect inflation to come down significantly in 2022. Now, more to the point, that’s not just my expectation, that’s the expectation of every forecast I’ve looked at and it’s very important. Basically, what the forecast tells you is that the job market should stay tight and get even tighter supporting wage growth while inflation decelerates, while it slows. So virtually every forecast has inflation growing about half as fast this year as it did last year. Now half as fast still might take you above the Fed’s target but if that — if that occurs, that’s going to be a real sign that some of our interventions, some market interventions are helping to ease these price pressures.”
Spin, spin, spin. Gotta give CNN’s Kate Bolduan some credit because she started to get tough with Bernstein until it seems someone behind the scenes told her to back off:
BOLDUAN: “President Biden on December 10th said that he thought inflation was at its peak. The quote was, I think it’s the peak of the crisis. It was not. And I remember very clearly our conversations over the summer when you were talking about inflation being transitory, it was not. Are you being clear eyed enough about what’s going on here?”BERNSTEIN: “Absolutely. I mean, I think the thing to recognize is that our team at the insistence of the president is focused on not just the month to month ups and downs, but on the underlying trends and there you have to appreciate the fact that –” [crosstalk]BOLDUAN: “Yeah, but I’m talking about underlying trends. The trends are not –“BERNSTEIN: “Yeah, and –“BOLDUAN: “– go ahead.”BERNSTEIN: “– so that — and so that’s the point. We’re going to get some months coming better, some months coming worse, probably when the president said that Omicron wasn’t going quite in the picture yet.”
Strong economy? Let’s rethink this because the Fed (which should end NOW) will likely raise interest rates before July.
That will likely cause the stock market to crash because the bull market has even been driven a lot by low-interest rates over the past decade or so.
When interest rates are low the bond investors have gotten zero return for their principal. Therefore the money flows into equities and higher risk investments.
If bonds start creeping up in yield investors will want to start putting money in there.
The blue line is the market rate for mortgages (government treasury bonds) while the yellow is what the fed controls.
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