We are currently in our 2nd year of substantial inflation, just as we’ve been predicting since 2018 (the pandemic stalled the inevitable), and as our last blog post spelled out, policy makers are terrified.
Although there has been some easing in prices (mostly energy) consumers have not stopped spending, and housing shortages are causing the overall cost of living to rise.
So we were right in saying that the Fed is willing to wreck the economy over its’ fear of inflation. High inflation only gets worse if it’s allowed to continue. Here’s what Jerome Powell said in his latest remarks;
“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” he said in prepared remarks. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
The best people can do for themselves right now is 1. Avoid taking on any new unnecessary debt. 2. Cut up your credit cards and 3. reduce expenses.
REconomix 