Wednesday, November 24, 2021

Fed’s Lowest Lowball Inflation Measure Spikes to Worst-Hottest 31-Year High. Powell Groans and Mutters | Wolf Street

The lowest lowball inflation measure that the US government produces, “core PCE,” which excludes the now soaring food and energy prices and understates inflation by the most, is used by the Fed for its inflation target: a symmetrical 2% “core PCE.” And this core PCE in October, released today by the Bureau of Economic Analysis, spiked by 4.1%, more than twice the Fed’s inflation target, and the worst-hottest inflation reading since January 1991:

It’s not temporary, Fed Chair Jerome Powell groaned and muttered this morning upon seeing this inflation monster blow out, following his $4.5 trillion in money-printing in 21 months.


Inflation could still be temporary however. We'll just have to wait and see, given that we seem determined to blow federal spending out to the moon. In my old-fashioned way, I think wasting trillions on boondoggle schemes and crony projects of all sorts is a classical Bad Idea. But who knows. Maybe MMT is right. But I doubt it very much. Alternatively, maybe there are so many Eurodollars sloshing around that even 5 trillion or whatever it is we're adding will just be a drop in the bucket, and we can go on lavishly spending other countries' money and paying them with green pieces of paper. The everything bubble will eventually pop, but it could be 5 or 10 years from now. Or it could be next month.

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