by Martin Armstrong
Armstrong Economics
“I don’t see the ‘stag’ or the ‘-flation’,” Fed Chairman Jerome Powell said during his Wednesday address.
Powell believed inflation would be “transitory.” He believed that the economy would come down for a “soft landing.” He believed we would enter the year and see numerous cuts due to waning inflation coming closer to the fictional 2% target. Yet again, Chairman Jerome Powell has missed the mark on stagflation.
If you really look at it, objectively, interest rates always rise during boom periods, and they decline during recessions and depressions. We will see increased inflation, probably into 2028 caused by shortages and war. But you’re looking at a declining economic growth, so that ends up being more like the economy of the 1970s, and you’re looking at what we call “Stagflation” where the inflation rate will be higher than economic growth.
Federal Reserve officials agreed on Wednesday to hold interest rates steady for the sixth consecutive meeting, signaling that they are willing to keep rates at the highest level in more than two decades for longer than previously expected and noting that progress on bringing down inflation has stalled.
Some of America’s best-known corporations are saying their consumers are being pinched by inflation as prices continue rising.
Another inflation wave is hitting as economic pain continues to worsen.
Inflation has been a cause for concern for some time now. In fact, in mid-2022, the Federal Reserve increased its target federal funds rate for the first time since 2018 in response to high COVID-era inflation. Since then, it has increased its benchmark rate several times, pushing it to a 23-year high, where it still stands today.
Inflation and war in the Middle East took some of the shine off the Golden Arches in the first quarter of the year.
WASHINGTON (AP) — Pay and benefits for America’s workers grew more quickly in the first three months of this year, a trend that could contribute to higher inflation and raise concerns about the future path of price increases at the Federal Reserve.
Today the man who oversees $150 billion warned King Word News that we may see terrifying hyperinflation.
For more than three years, readings from the U.S. consumer price index, or CPI, have been well above the Federal Reserve’s long-term inflation target of 2%. Americans have likely noticed prices surging for goods and services ranging from groceries to insurance to housing to transportation. Unfortunately, inflation has hit certain industries and commodities harder than others.