Inflation had almost stopped for several years. We’re still below the fed mandate. Inflation encourages people to work as opposed to living off assets they already own.
The Fed doesn't have a specific mandate for inflation levels, so it is impossible to be below it. The Fed mandate is to “promote effectively the goals of maximum employment, stable prices, and moderate long term interest rates”.
The Fed mandate doesn’t matter. They need to keep pumping to stave off depression.
Inflation or no, the banks are going to go bust without infusions of cash as retail folds up and securitized leases and leveraged commercial developers implode.
I live in upstate NY, not exactly a boomtown... the economy is stabilized by government workers whose wage growth is 0-2% annually. The apartment that I rented in a nice suburban development for $550 in 2000 is $1150 in 2020 — well ahead of inflation. I see that pattern in many categories.
Those with a lot of assets tend to be able to find yields to offset inflation. Stocks and real estate tend to adjust with inflation regardless of yield.
Inflation mostly encourages lower/middle class people to consume every dollar instead of saving for the future.
looks at the stock market, sees people thriving off of assets they already own during the pandemic Are you sure these people will be going back to work soon?
Right. We need a lot more inflation. We need to devalue the dollar to make exports more competitive and rebuild the working class. Push the people making money off the stock market back into the workforce.
Since for moderate levels of inflation (ie low double digits), stocks are inflation proof, if this actually improved competitiveness of American firms, moderate inflation would be a boon for stockholders. Big losers would be wage employers, who’d see their pay not catch up with growth of prices: this is in fact one of the core reasons we even target positive inflation in the first place, to counteract the effect of sticky wages that do not go down when necessary.
Low double digits is not considered moderate levels of inflation, if you're talking annually. In the 1970s in the US there were years of double digit inflation and real returns were negative.
Long story short by making inflation appear lower then it is, the tax brackets have stayed lower then they otherwise would, costing tax payers an extra 130 billion over 10 years
> The Fed has been fudging the inflation numbers since Moses was in short pants
The Fed hasn’t been around that long, and isn’t even involved in inflation numbers, which come from the Bureau of Economic Analysis in the Department of Commerce.
Banks know it — Citi and Chase pretty much stopped cheap balance transfers in April for most customers.