Pubblicato in: Banche Centrali, Devoluzione socialismo, Stati Uniti

Fed. Inflazione. Iniziano i forti dubbi. Tutti sul braciere. – Bloomberg.

Giuseppe Sandro Mela.

2021-06-08.

FED 001

«There are plenty of holes in the arguments for keeping monetary policy loose»

«On that measure CPI is rising at an annual rate of 5.2% and PCE by 4.8%»

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«The Fed’s inflation logic is flawed, and dangerous»

«Thus are short rates kept at pretty much zero and long rates suppressed by dint of the U.S. central bank buying $120 billion of Treasuries and mortgage-backed securities every month.»

«In speech after speech every committee member declares that the sharp pick-up in U.S. inflation is temporary»

«But their reasoning is poor, and dangerous»

«Start with the Fed’s first argument, the oft-repeated claim that the rise in inflation is caused by base effects. The reasoning’s simple: If inflation dropped like a rock in the pandemic then of course it would go up when the economy recovered»

«But the sharp rise in inflation in the past few months — in April, CPI and PCE inflation (the Fed’s favored gauge) rose 4.2% and 3.6% respectively compared with the previous year — is due only partly to base effects»

«On that measure CPI is rising at an annual rate of 5.2% and PCE by 4.8%»

«Both measures will almost certainly be higher still in May»

* * * * * * *


La Harris-Biden Administration è sulla graticola ad arrostirsi assieme alla Fed.

Qualsiasi decisione prendesse indurrebbe serissimi guai.

E pensare che a breve la Harris-Biden Administration sta per iniettare nel sistema seimila miliardi di sovvenzioni di denaro fiat.

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The Fed’s Inflation Logic Is Flawed, and Dangerous

There are plenty of holes in the arguments for keeping monetary policy loose.

With one voice the Federal Open Market Committee declaims that it’s too soon to tighten monetary policy. Thus are short rates kept at pretty much zero and long rates suppressed by dint of the U.S. central bank buying $120 billion of Treasuries and mortgage-backed securities every month.

In speech after speech every committee member declares that the sharp pick-up in U.S. inflation is temporary and that it’s just fine to have a bit of an overshoot to make up for undershooting the target before. That they’re all so consistently dovish doesn’t necessarily make them wrong. But their reasoning is poor, and dangerous.

Start with the Fed’s first argument, the oft-repeated claim that the rise in inflation is caused by base effects. The reasoning’s simple: If inflation dropped like a rock in the pandemic then of course it would go up when the economy recovered. Trivially this is true. But the sharp rise in inflation in the past few months — in April, CPI and PCE inflation (the Fed’s favored gauge) rose 4.2% and 3.6% respectively compared with the previous year — is due only partly to base effects.

You can see this by refining the year-over-year comparisons. The chart below shows both CPI and PCE measured by the annualized change in the last three months compared with the previous three months. On that measure CPI is rising at an annual rate of 5.2% and PCE by 4.8%. That’s already higher than the pick-up after the financial crisis, when the collapse in inflation was far deeper. Both measures will almost certainly be higher still in May.

Un pensiero riguardo “Fed. Inflazione. Iniziano i forti dubbi. Tutti sul braciere. – Bloomberg.

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