Still on Team “Þe Fed Has Got Þis”, &
BRIEFLY NOTED: 2022-04-28 Th
CONDITION: Still on Team “The Fed Has Got This”:
The five-year forward five-year CPI-inflation breakeven crossed 2.5%, but then retreated on Tuesday:
The creation of an unwelcome and painful-to-extinguish persistent inflationary wage-price spiral would run through this chain of causation:
(1) the bond market loses its confidence that the Fed will respond to keep inflation anchored →
(2) workers in bosses in labor and product markets lose their confidence that the Fed will respond to keep inflation anchored →
(3) spot-market wage bargains and pricing decisions reflect that loss of confidence →
(4) durable forward contracting arrangements reflect that loss of confidence. It is (4) that produces the inflation inertia that is then a wicked problem.
So far, we are still not at (1).
One Video:
Jamie Raskin: Truth & Trauma <https ://www.youtube.com/watch?app=desktop&v=020f-KUK9cQ>:
One Image:
Very Briefly Noted:
Yanis Varoufakis: Macron’s Win Is Not Populism’s Defeat <https://www.project-syndicate.org/commentary/macron-has-strengthened-french-far-right-by-yanis-varoufakis-2022-04>
Nouriel Roubini: The Gathering Stagflationary Storm: ‘The new reality with which many advanced economies and emerging markets must reckon is higher inflation and slowing economic growth. And a big reason for the current bout of stagflation is a series of negative aggregate supply shocks that have curtailed production and increased costs… <https://www.project-syndicate.org/commentary/world-economy-stagflationary-perfect-storm-by-nouriel-roubini-2022-04>
Adrian Wooldridge: Workers Are Winning the Return-to-Office War Because They’re Right<https://www.bloomberg.com/opinion/articles/2022-04-25/workers-are-winning-the-return-to-office-war-because-they-re-right>
Robert Armstrong: Investors Brace for the Fed’s Slowdown <https://www.ft.com/content/3276a8fd-63f3-4028-95dd-4248841fe28b>
Kris James Mitchener & Gonçalo Alves Pina: Causal Effects of Countercyclical Interest Rates: Evidence from the Classical Gold Standard: ‘Countercyclical interest rates, defined relative to export-price shocks, stabilized both output and the domestic price level. This stabilization was more effective for the price level than for output… <https://www.nber.org/papers/w29970>
Daniel P. Bolger: Dragons at War: 2–34 Infantry in the Mojave <https://archive.org/details/dragonsatwar234i0000bolg/>
W. Stanley Jevons (1865): The Coal Question: An Enquiry Concerning the Progress of the Nation, & the Probable Exhaustion of Our Coalmines <https://archive.org/details/bub_gb_ww88bypTQUEC/>
Twitter & ‘Stack:
Eric Topol: ’~920,000 of confirmed American deaths are in age 50+ which equates to 1 in 125 chance of dying from Covid in this age group…
Matthew Yglesias: Twenty-three theses on Elon Musk and Twitter: ‘Back in 2012 Musk was an Obama donor, and Mitt Romney was slamming Tesla as a “loser” company propped up by the Obama administration’s misguided policies…
