by Hassan Afrouzi, Marina Halac, Kenneth Rogoff, and Pierre Yared
CEPR
Despite the large surge in inflation across advanced economies since 2021, long-term expectations are mostly in line with central bank targets. However, this column argues that the factors which facilitated low average inflation for decades have started to reverse. These include globalisation, de-unionisation, and a deepening of the Washington consensus including especially fiscal restraint. Using a theoretical model, supported by broad empirical evidence on changing fundamentals, it demonstrates the relationship between economic and political factors, long-run inflation, and transitions between steady states. The growing tension between central banks and democratically elected politicians can make low and stable inflation more difficult to achieve in the future, with negative consequences for economic activity.
(Bloomberg) — The European Central Bank faces significant dangers to achieving its inflation goal, according to Vice President Luis de Guindos, who cited factors that could pull prices too far in either direction.
It’s barely been a year since the 2023 bank crisis in which several large banks, including Silicon Valley Bank and Signature Bank, failed.
Flash back to August 2022, when Fed Chair Jerome Powell gave a nine-minute speech at Jackson Hole, Wyo., warning investors to expect “some pain” in the economy in order to lower inflation.
On Friday’s broadcast of Bloomberg’s “Balance of Power,” White House Council of Economic Advisers Chair Jared Bernstein reacted to the March PCE report that showed the yearly PCE inflation rate increasing with the annual core rate holding steady along with 0.3% monthly growth in both overall and core PCE, the same as it was in February, by stating that “It was nice to hit the expectations number for the PCE, both headline and core, this morning.” And said that “we expect inflation to continue a bumpy path down towards target.”
Not long ago, senior citizens got the two biggest annual increases in their monthly Social Security checks that most had ever seen. But for many of them, the adjustments still weren’t enough to cope with the runaway inflation of earlier this decade and the continued high prices for food, housing, utilities and other necessities.
If we combine the Biden-Handler massive cap gains tax increase and the impending wealth tax on bit”coin” and other assets (“mixers” are “money laundering” – unlike the Oligarchy’s Ukraine money laundering op), rising long rates leading to bank failures – what is the general intent? Deliberate impoverishment and elimination of agency via some sort of near-term Great Reset. No cows, no milk, no chickens (BIRD FLU!), no gardens (carbon!), no health (forced six-dozen-shot chronic-disease-and-death-vaxes), no inheritance, no savings or wealth = You Will Die Young and Destitute. The scheduling of the tax pre-“election” doesn’t make any sense. Maybe – there won’t be an election? Maybe “they” have successfully infiltrated Orangeville; his DeathVax stance suggests this could be true. Or maybe “they” are on a no-changes timeline with a “global” ticking clock – there is no choice. Polar shift? “Return of the Elohim?” I don’t know. As Chris said using the “Rules for Rulers” framing, inflicting a wealth tax on the donor class makes no sense, so I assume something not yet visible is the cause.
There is nothing normal or good about tariffs.
WASHINGTON — A measure of inflation closely tracked by the Federal Reserve remained uncomfortably high in March, likely reinforcing the Fed’s reluctance to cut interest rates anytime soon and underscoring a burden for President Joe Biden’s re-election bid.