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2022-01-12

Inflation rises 7% over the past year, highest since 1982

Despite the strong gain, stock market futures rose after the news while government bond yields were mostly negative.

CNBC 12 January 2022


Interest rates aren’t really the right tool to control inflation
When the problem is lack of supply, the Fed’s tool kit is useless

Credit growth has been anemic despite very low interest rates. Real household debt has increased just 2.2% annualized since the pandemic began while business borrowing is growing at the slowest pace in eight years, even after businesses loaded up on cheap pandemic loans early in 2020.

Raising rates would have little impact on the economy because credit growth is already weak.
It doesn’t look as if easy credit is the problem.

Rex Nutting MarketWatch Jan. 12, 2022  



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