4% CPI is only ~ 1.7 percentage points higher than the Fed's PCR target and merits cautious praise for a pretty skillful recovery from its late 2021 delay. Cautious because it may have already gone too fast, too far with FF increases. TIPS traders, at least think so.
I think these points are all very well said and not said enough.
In my econ coursework, I was always taught that, broadly, inflation hurts those that rely on passive income (aka "rentiers" in some contexts). We've been keen to reveal the intense income and wealth disparity in our society, and inflation seems like a good enough storm to reverse some of this trend. This has created some really frustrating observations about the discourse around the subject.
When I look at the conversations with this in mind, I find a large group arguing completely in bad faith about the harms and terrible consequences for people that have either inflation-indexed income or market-based active income. At the same time, I see a much more reasonable group take those concerns at face value instead of pushing back against it. I'm seeing in real-time a deeply flawed and misguided narrative forming that will force us into making similar mistakes decades in the future.
Yep! Brad you need to speak louder than usual to make people see this. As more workers enter this labor market -- and there are a lot more people than is commonly acknowledged -- that hot-wage-growth issue should be able to take care of itself. Brad, your supply-demand "Parrot" from many years ago needs to be brought out for policymakers. If they think wage growth is a problem, then they should encourage as many workers as possible to enter the labor market. Improve the efficiency of the job-matching portals, if they can. Not rationing. Not decrying job openings. Powell has mentioned those job openings often. Hoping that the Fed will let this transition from the COVID recession run its course in the good way. This has been a very good economy for workers. Why aren't more people saying this and louder?
Someone should post a 60-year chart of another Conference Board series "Labor Market Differential" that asks consumers whether jobs are easy to find net of those who say that jobs are difficult to find. It is up there, close to the high achieved in the late 1990s. The Z-score on that series has been between 1.75-2.0 standard deviation above the mean over the past year or so, the highest range in the history of that series since Feb 1967.
I don't think MattY would disagree with your analysis here, it's just a matter of emphasis. He's written in several places about his frustration with people refusing to see that it made sense to err on the side of over-stimulating, and that our current problems are much better problems to have than the long recession of the 2010s. Obviously it would've been even better if we'd had a crystal ball that had let us predict how to get just the right amount of stimulus to end up with a strong labor market and less inflation, but unless the whiners have such a crystal ball on offer, they really should go stuff it.
As we said in the 80s, the real problem with inflation is that eventually someone will do something stupid to ends it.
4% CPI is only ~ 1.7 percentage points higher than the Fed's PCR target and merits cautious praise for a pretty skillful recovery from its late 2021 delay. Cautious because it may have already gone too fast, too far with FF increases. TIPS traders, at least think so.
I think these points are all very well said and not said enough.
In my econ coursework, I was always taught that, broadly, inflation hurts those that rely on passive income (aka "rentiers" in some contexts). We've been keen to reveal the intense income and wealth disparity in our society, and inflation seems like a good enough storm to reverse some of this trend. This has created some really frustrating observations about the discourse around the subject.
When I look at the conversations with this in mind, I find a large group arguing completely in bad faith about the harms and terrible consequences for people that have either inflation-indexed income or market-based active income. At the same time, I see a much more reasonable group take those concerns at face value instead of pushing back against it. I'm seeing in real-time a deeply flawed and misguided narrative forming that will force us into making similar mistakes decades in the future.
Yep! Brad you need to speak louder than usual to make people see this. As more workers enter this labor market -- and there are a lot more people than is commonly acknowledged -- that hot-wage-growth issue should be able to take care of itself. Brad, your supply-demand "Parrot" from many years ago needs to be brought out for policymakers. If they think wage growth is a problem, then they should encourage as many workers as possible to enter the labor market. Improve the efficiency of the job-matching portals, if they can. Not rationing. Not decrying job openings. Powell has mentioned those job openings often. Hoping that the Fed will let this transition from the COVID recession run its course in the good way. This has been a very good economy for workers. Why aren't more people saying this and louder?
Someone should post a 60-year chart of another Conference Board series "Labor Market Differential" that asks consumers whether jobs are easy to find net of those who say that jobs are difficult to find. It is up there, close to the high achieved in the late 1990s. The Z-score on that series has been between 1.75-2.0 standard deviation above the mean over the past year or so, the highest range in the history of that series since Feb 1967.
I don't think MattY would disagree with your analysis here, it's just a matter of emphasis. He's written in several places about his frustration with people refusing to see that it made sense to err on the side of over-stimulating, and that our current problems are much better problems to have than the long recession of the 2010s. Obviously it would've been even better if we'd had a crystal ball that had let us predict how to get just the right amount of stimulus to end up with a strong labor market and less inflation, but unless the whiners have such a crystal ball on offer, they really should go stuff it.