It’s Wednesday, and I have two things to write about briefly before exposing readers to some more music. First, the evidential base for my ‘this inflationary period is transitory’ narrative gains more weight. The latest CPI data from the US Bureau of Labor Statistics shows that inflation has peaked in the US and falling rapidly in the goods sector, which started this episode off. The second topic relates to measuring progress in the development and spread of new ideas. It is often difficult to know how far a new framework has penetrated the broader debate. But sometimes things happen that remind me of how far we have to go in changing the framing and language surrounding fiscal capacity and the related topics, that Modern Monetary Theory (MMT) has brought to the fore. We finish with some calming guitar playing....Bill Mitchell – billy blog
US inflation has peaked and monetary policy had nothing much to do with it
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
"Transitory" will feature in Republican attack ads. Brandon will be blamed.
ReplyDeleteBiden told Powell “stay the course” …
ReplyDeleteIt hasn't peaked. It's paused because of the pullback in oil prices that has happened largely due to de-stocking the US SPR. I thought Bill Mitchell was an MMT guy? If so, he should know that rate hikes are inflationary, and the Fed's insistence on continuing its rate hike program will drive inflation back up in 2023.
ReplyDeleteIt may be that Fed will keep increasing the risk free rate until that rate = whatever they think “inflation” is… or maybe go a bit above whatever they think the figure of speech “inflation” is..,
ReplyDeleteThis is what Larry summers has been saying…
The thought process has been going from summers > Brandon> Yellen > Powell…
At least leading up to the election … now it seems “stay the course” (another figure of speech)….