The neutral interest rate is 6% - much higher than Fed policy makers admit
Inflation will remain high for a long time unless a less-ideological, pro-growth government is elected.
From the end of the global financial crisis until COVID, inflation risks were low—thanks to businesses optimizing supply chains and cheap labor and energy in places like China and Russia.
Chasing 2% inflation, central banks kept interest rates historically low.
Chronic shortages of lithium will make electric vehicles much more costly.
The unreliability of solar and wind and cost of nuclear and fossil-fuel backups to ensure a reliable grid will make electricity and driving those vehicles more expensive.
Peter Morici MarketWatch 30 November 2022
Paul Volcker is best remembered for slaying double-digit inflation in the early 1980s.
Often forgotten is that for the next 10 years the annual rate of increase in the consumer price index averaged about 4%.
Peter Morici MarketWatch 8 June 2022
https://englundmacro.blogspot.com/2022/06/we-are-more-likely-looking-at-4-than-2.html
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