by Sundance at The Conservative Treehouse
It’s all a ruse; an economic shell game being played for politics – nothing more.
Consider this quote from Fed Chair Jerome Powell today, “Inflation remains well above our longer-run goal of 2 percent. Over the 12 months ending in September, total PCE prices rose 6.2 percent. Excluding the volatile food and energy categories core PCE prices rose 5.1 percent. And the recent inflation data again have come in higher than expected. Price pressures remain evident across a broad range of goods and services. Russia’s war against Ukraine has boosted prices for energy and food and has created additional upward pressure on inflation.” (source)
You can argue Powell’s points of demand side inflation all day long, it matters not. It’s nonsense. Take interest rates to 10%, or even eleventy percent, and that will not stop inflation because demand is not creating it. Current inflation is a supply side issue, driven by a radical change in energy policy. I have made this case for well over a year, sooner or later people are going to have to stop believing the demand side nonsense.
As Powell himself noted, “with today’s action, we’ve raised interest rates by 3 ¾ percentage points this year,” and yet inflation hasn’t flinched. Why? Because there was no excess consumer demand to tame all year. Demand for consumer goods has been in a freefall since the fall of 2021, while the prices of those goods have remained on an upward trajectory because costs associated with producing them continue rising. That’s a supply side inflation issue, not demand – but Powell cannot admit it:…
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