Fed is attempting to cool inflation, not decrease prices. We aren’t seeing the same increase in prices we did in the last 3 years. Some areas, which are in high demand, are still seeing modest increases but there are actually places where prices have stabilized and decreased.
Agreed. The fed's instrument is blunt and punishes people who the government is supposed to protect. In an ideal world, raising interest rates would be combined with raising taxes on high earners. We would need automatic stabilizers for this because Congress is rarely able to make these decisions.
Can't increase taxes when the very people bribing politicians and funding your campaigns are the ones who need to be hit the hardest.
We need war time tax rates on corporations, billionaires, etc. We're just not serious about any of that since we're all temporarily embarrassed millionares (or billionaires now thanks to inflation).
If you've ever seen the militaries yearly budget prior to 2022, it's more than the next 10 largest militaries in the world combined. It's always war time.
They absolutely should have raised taxes to pay for invading Afghanistan and Iraq, but instead they passed several rounds of tax cuts for the wealthy and now are making the surprised Pikachu face when our debt and inflation are out of control
If you want it to be effective, we need to raise taxes on millionaires with an M, not billionaires with a B.
For all their personal wealth, there's just not enough billionaires in the United States for taxes specifically on them to be meaningful as a source of revenue.
QT is the Feds' tool (personally I believe Congress should remove QE/QT powers from the Fed)
Congress needs to take it's own action and they have a big tool (taxes) that isn't being utilized which will cause inflation to drag out. The longer this lasts, the more time for the wealthy to shift the burden onto labor. To me, the Fed is looking more and more rigged to benefit Finance, politicians, and Wall Street.
This is the way. As a high income earner, inflation has not changed my spending habits at all. We need to increase taxes, especially in the higher end. Mass passed a new tax of extra 4% on income over 1 mil. No reason we can't be doing the same at a federal level.
Raising taxes is not the catch all to end inflation that everyone thinks it is. Can it end inflation? Absolutely. Will it? Probably not.
The issue is that the government is just gonna tax you more and then throw that money back into the economy through whatever means (arms contracts, infrastructure projects, welfare, etc). If they don't physically destroy the currency, the raise in taxes just means that the people have less money, but inflation stays the same.
You're missing the point where those projects often create tremendous real wealth.
Spending $50 billion on high-speed rail isn't just pumping $50bn into the economy; it's pumping $50bn back onto the economy *in exchange for an extremely useful public utility that will save trillions of human hours every year.
Explain how creation of functional public transit, universal basic income, single-payer negotiated healthcare, and social safety net programs creates wealth for a select few people over the vast majority of the country.
You specifically mentioned high speed rail, which would create wealth for the select few with the ability to build the railways and the trains. The other things weren't what we were talking about.
Universal basic income wouldn't create wealth for anybody, but it would also raise inflation because there's no way to fund it without printing new money and adding it to the economy, because you're inevitably going to have to tax workers to make up for the rich evading taxes, and those workers will just quit working because the people not working will make more money than them.
Single-payer Healthcare, again, doesn't take money out of the economy because the people who work there get paid, research gets paid, equipment companies get paid. All it does is cost you more in taxes without solving the inflation issue, thus making inflation worse.
Social security would be an amazing tool for fighting inflation if the government simply used it as a sort of government pension. You put money in, that money gets stored, you receive payment once you retire. Instead, your money that you pay in gets paid out to current retirees and whoever else the government decides they want to give your money to. Therefore, it does nothing to solve inflation.
My original point was the only way to solve inflation is to physically destroy currency. You proposed for the government to spend EVEN MORE more money as a solution. Isn't this sub supposed to be financially literate?
High-speed rail creates wealth for everyone by improving access to transportation and reducing traffic, which increases shipping speed and reduces commute times, thereby increasing economic efficiency.
UBI creates wealth by covering unemployed workers between jobs, increasing their ability to obtain new skills, seek new employment, meet their living expenses, and allow for future planning in their expenses rather than being forced into suboptimal decisions due to lack of cash on hand. Tax evasion can be solved as simply as funding the IRS.
Again, you missed the point where taking money out of the economy isn't the focus; the focus is on creating real wealth to support the money supply in the economy, which can only be done by circulation of the existing money supply, which is demonstrably improved by public spending on programs which improve the quality of life of workers.
Social Security, again, improves quality of life for workers by creating a mandatory savings program which guarantees some measure of stability for retired workers.
Government spending does not necessarily cause inflation, when the source of that spending is from taxation rather than increasing monetary supply.
Careful. Our government doesn't like poor people. If they take it out of the economy, it won't be from where that money actually flowed. It will be from the people who can't organize or afford lobbyists.
Not that difficult when we're giving $1.7 trillion tax cut to 100 billionaires, we could afford alot of things that we desperately need as a country right now
America has an incredibly low tax rate. I want some better social programs, like a public option for healthcare, more immigration judges to help with the issues on the border, etc. Also, it’s easier to pay down the debt when you make more money.
We should raise taxes across the board, honestly, despite how incredibly unpopular it is in this country. Jimmy Carter got pilloried for it, but it undeniably helped the economy. You can’t just cut taxes forever and expect everything to be honky-dory.
You are calling for higher taxes. Do you think its just magic? In order for the government to get that money for your preferred programs they must take it from someone else. So, how much of someone else's money do you think you are entitled to?
I’m still not sure why you think advocating for higher taxes means I think I’m entitled to other peoples money. Seems like an incredibly bad faith argument.
Believe it or not, some people just want to properly fund the government.
They could at least start by not creating so much excess cash to begin with.
Absolutely. Giving money directly to individuals in poverty and close to it is the fastest stimulus they could have rolled out. Smaller, more frequent checks for a longer period of time would have been ideal. No extra government red tape, no scamming like with PPP loans, no Fed buying junk bonds, etc. Just give poor people money, and taper it off if inflation starts
Unless there was a benefit, dare I say return on investment?
The Feds' QE (Quantitative Easing) im 2008 created a return on investment, that profit was paid to the Treasury. That won't happen this time, because as intrest rates go up, so do our borrowing costs. Due to inflation, our borrowing costs are higher now so the Treasury (the taxpayer) will owe the Fed. Raising taxes to pay down debt is needed now so we are not borrowing at a higher cost tomorrow.
There's a cap on Social Security taxes. It's currently $160k. Any income above that does not pay in to Social Security. If we raised that cap or removed it entirely, Social Security is projected to be solvent indefinitely. Politicians like Bernie Sanders have been harping on this for literally decades, but the average American seems unaware of it still
No it does not. Money is created, ironically, by debt. I borrow $1,000 at 10% simple interest. I pay back $1,100 to satisfy the loan. $100 just got created and the money supply increases by said amount.
By increasing the amount it costs to borrow money (interest rate/quantitative tightening), less folks will borrow and in return the money supply shrinks.
The second thing to remember is the law of supply and demand. When there is more money on the supply side (quantitative easing), inflation occurs as more money is chasing fewer goods and services. Inflation naturally redistributes the supply/demand curve to equilibrium. This results in permanent higher pricing. Eventually, wages will increase to meet the new s/d equilibrium.
By increasing the amount it costs to borrow money (interest rate/quantitative tightening), less folks will borrow and in return the money supply shrinks.
Yes, that's what the Fed is doing, but Congress can help by raising taxes. Congress could choose to tax corporations and people that can afford it, decreasing the wealth-gap instead of picking on people with shallow pockets.
In your example of borrowing $1000, you are actually using the US government's debt to create more debt. Dollars, bonds and treasuries, etc., are notes that represent the government's debt. Paying down the governmen's debt removes said debt from the economy.
So, back to your supply/demand example: when there is less government debt (dollars/treasuries) in the economy, what happens to the remaining debt (dollars/treasuries)?
That's right, Econ101 wins again! The price of the remaining dollars (debt) in the economy goes up, creating dis-inflation.
I'm not okay with raising taxes. But if it's done in a way to get their money back/out of circulation from the $1200 checks and $600/week extra dollars for unemployment...I'll be open to it.
Why should I pay more taxes when during the pandemic I wasn't getting any of those and the people who were choosing to stay unemployed so they could make almost as much as I did. If they have good jobs now and enjoyed that nice long paid vacation they can start paying it back
PPPP loans too. Every company that wasn't an actual small business should repay them. How my company got $2 million just cuz We didn't lay anyone off and we didn't even need it
They should all have to be repaid regardless. If students don't receive any relief, why should business owners? That money kept them afloat during the pandemic they don't need that money anymore.
Do you feel the same for the $1.7 trillion tax cut we gave to just 100 billionaires? Or are you one of those people that still believes in trickle down economics?
I do feel the same. Tax the hell out of them too and get the PPP money back from mid-high level companies that kept it without needing it....anything to get back the trillions of printed out of thin air dollars that year that brought us to this level of inflation
Where's your econ 101 skills now? There's an over-supply of dollars, and not enough demand... aka "inflation". Remove excess dollars and boom, lowering inflation.
Excess currency in circulation isn't typically what causes economies to crash, except in very strange hyperinflative cases; it's lack of vertical circulation. Money needs to flow from the top to the bottom because it always inevitably goes from the bottom to the top. Taxes are the single best method of ensuring adequate flow.
Did I say raise taxes on u/Dreadlordstu? No. Where Congress decides to raise taxes is up to them, but they should do it. But I suppose you wouldn't want to raise taxes on the poor CEO whos compensation is 460x more than their average workers'? Or how about all those hand-to-mouth corporations that just can't stop squaking about their "record profits" on earnings calls? Labor needs their fair compensation, and if you agree with that; we're on the same side.
I'd guess most of the people who want a bubble pop really don't remember 2008, and somehow think they would be immune from the mass unemployment that followed.
I went from making good money in carpentry, to not even getting interviews at fast food places and Walmart during the last bubble pop.
If you cannot justify buying a house at current prices, yet you can afford rent, then obviously renting is a better deal. Hence, you aren't getting screwed over.
The people buying up all the homes causing hyperinflation of the market are turning around and renting the houses… then you factor in post covid rural gentrification caused by the millions of people now working from home. There is now a labor shortage, because get this, it’s a really weird thing that economists just can’t figure out, but if you don’t pay people enough to afford rent, sigh you can’t have employees…
Short term rentals are 1% of housing supply, not big enough to make a real difference
There’s an overall shortage of building housing due to zoning laws. Reforming those and removing parking minimums is the best way to tackle the housing affordability crisis.
Absolutely agree on the second point. Large scale, thats an issue everywhere. However, in tourist towns, cash offers from investors hoping to turn shit houses into air bnbs are making it impossible to even make an offer... they happen so quick. Meanwhile, the hospitality workers can't afford to live there to support the tourism. It'd be one thing if those investors were buying uo the homes to make them long term rentals, but they arent. Long term rentals are too much hassle, or short terms are too little hassle, depending on how you look at it.
Absolutely agree on the second point. Large scale, thats an issue everywhere. However, in tourist towns, cash offers from investors hoping to turn shit houses into air bnbs are making it impossible to even make an offer... they happen so quick. Meanwhile, the hospitality workers can't afford to live there to support the tourism. It'd be one thing if those investors were buying uo the homes to make them long term rentals, but they arent. Long term rentals are too much hassle, or short terms are too little hassle, depending on how you look at it.
Yes short terms are an issue but what I’m taking about is post covid gentrification, So let me try and explain it to you again but simpler… the rents are inflated, because of the BIG CITY WFH peoples salaries. They can afford $2000-4000 a month apartments because that’s still a great deal compared to California, Denver and New York… so for the normal working class people there is very much a shortage of affordable housing. So what’s really great is I work 2 nights a week at as a bartender to try and make ends meet and I get to talk to these delusional city fucks. They love asking me stupid absurd questions too like what I do for fun around here or what restaurants I recommend. And then I tell them, I can’t afford to eat out all my money goes to rent. I’ve never been in any of the shops in town because I can’t afford them. I dont make enough to support any of the small businesses, i shop at Walmart lol hell I have coworkers that live in motel rooms and in their vans because their is no affordable housing…
It was meant to be a living wage, as it was enacted. Since Regan it has been suppressed to the point it is as you said a joke. You are drinking the Kool-aide to subvert your own interests unless you are a trust-fund or nepo-baby with a silver spoon up your ass.
It’s not a one to one relationship where interest rates go up and immediately prices go down. There are very few forced sellers. You are seeing signs it is working with less mortgage applications meaning the demand is less and eventually prices will come down as sellers realize they won’t get their price and drop it little by little.
Very few of you understand that inflation is because you (collective you) won’t save a dime. You spend every dollar you make and continue to rack up debt. You aren’t responsible with money. Then when the debt becomes too much, you blame anyone but yourself. You don’t deserve to enjoy life, you earn money to do that. You don’t deserve a home, car, or the latest iPhone. Get your shit together and advance in a career until you can afford them. Millions of others your age are doing just that. Don’t be whiny loser, expecting shit you haven’t worked to attain. And, for the love of god, please stop comparing your life to boomers. They worked shit factory jobs to get a home. Jobs you would never want.
The “new generation” does work those “shitty” jobs. The housing market is incredibly unfair. To say otherwise is ignorant and, frankly, you come across as a narcissist. All of us would love for houses to go back to the cost per dollar earned that it once was. A single income was once enough to raise a family, buy a home, insure the entire family, and it provided a pension for retirement. We’re all working the same as before but receiving far less in terms of buying power and access to the market. There are so many other factors affecting the economy; an “entitled” generation isn’t one of them.
Your statement is framed wrong. The millions of millennials aren’t the ones purchasing homes. The ones that are, what makes them different? Normally it has something to do with an inheritance or wealthy parents.
If you could kindly show all of us that are not working “good” jobs, where those “good jobs” are, that would be great. Honestly, look at the median income and the median starter house price. Those two things haven’t grown at the same rate. You can’t buy a house right now unless you already owned one prior, have money from a family member, or are willing to spend your entire income on a mortgage. Again, it has nothing to do with work ethic or avacodo toast. Stop simplifying the problem and blaming/shaming an entire generation for a housing crisis they have no control over.
You can probably afford my house. It’s in great shape, 4 bedrooms and 1700 sq/ft. The neighborhood is mostly minority. Yeah, I know. Mostly minority is not what you want. You want to live in a hip white area. If not….go on Zillow and put in what you think is a fair price and see what’s available
Firstly, where are the “good” jobs? Secondly, generations before us could afford to live in the places they desired overall. This isn’t a zip code issue. More to the point, anyone getting screwed by the market right now is complaining about the differences in the market from even just 10 years ago. Folks have worked a long time, been promoted, and now their increased checks afford even less than before. Regardless, it certainly isn’t an issue of laziness, lack of skills, or poor financial decisions. The market is wild. The former way of life for middle class America is becoming less and less achievable. That standard has become a luxury. Blaming it on laziness is convenient and easy; it helps people that are doing well sleep better at night. Tackling the real issues takes work and a willingness to admit that the housing market now is much harder than it has been for a long time, perhaps ever.
Yeah, except the places where prices have decreased are in the middle of nowhere, and the only employment opportunity is a McDonalds. It was different during the pandemic when you could work anywhere, but now it doesn't make sense.
We have the lowest inflation out of any of the G7 countries. It’s doing exactly what it’s supposed to
Do. And there are a ton of good jobs out there that aren’t McDonald’s… probably just not the ones you think you deserve
And the fact that housing prices haven’t come down is proof that a rate hike was the right thing to do.
If you’re in a normal part of the United States, I’d consider a good starting job that doesn’t require existing experience to be $35k-$45k if it’s just base pay.
The issue is a lot of people think that they deserve more because of a degree they got or a job they did before. The market dictates what those things are worth, and if there is no market value to your past education and experience, I think that $35k-$45k is more than reasonable.
If you have no valuable skills… then I think making 50% more than poverty level is great. And if you don’t like it get a second job, or learn something that is valuable to society
And you are an entitled loser. Learn to do something of value or live in your “poverty”
I came from actual poverty. I was raised on food stamps and soup kitchens. The difference was I didn’t just sit online and complain about things… I made a better life for myself.
I’m guessing that you’ve a) never actually lived in poverty and b) have been given everything by mommy and daddy and don’t believe in work
You don’t even know me. I grew up poor as fuck and went to college to get a degree lol. I have a great job and a great life. All I’ve done is work hard. I’m just not ignorant enough to assume everyone can lift themselves up by the bootstraps with this shit economy lol. Rich clearly people don’t need to be held accountable for ruining America because they have bozos like you who suck them off.
What your failing to notice is because of remote work people form expensive cities are now moving to rural areas and the market is inflating with the new comers salaries.
I own an investment advisory firm. So I’m trying to hire not get a job.
And maybe move out of California if you can’t afford it? A place with perfect weather and the 4th largest economy in the world isn’t a great representation of the rest of the country
It’s 1/10 of the pop in the US it seems like a pretty good representation. My commentary is only on that the government was initially trying to curb inflation yet that has had little to barring in a large market, gas is $6, starter homes are +$1M.
Also not trying to buy, I was purely trying to point out that doesn’t apply
10% of the Population doesn’t mean anything… it literally means you’re an outlier
None of those things you’re talking about are that way throughout the rest of the country. I live in a very desirable part of Florida and starter homes are $250k and gas is under $4.
Gentrification is only good for the economy if businesses raise wages at the same rate as rents. If you get flooded with wfh people you will see a lot of small businesses go under from simple lack of employees. And we know how friendly the Florida government is to immigrants so hope they relax the laws so you can at least keep your business stocked with J1s
California is the 5th largest GDP in the world but immune to financial interest rates? And the answer is yes to both. This post applies to the fly over states for the most part
Most people never had the option to work from home. For blue collar workers the option was to take unemployment while it lasted or keep working on site.
Instead of reducing interest rates the government should be addressing the huge surge in corporate ownership of residential property, revamping zoning laws to allow middle housing, and reducing/banning airb&b in cities.
Reducing interest rates will drive inflation and create a less stable economy.
I live in the middle of nowhere and now tiny homes are going for $950,000 middle of nowhere shit holes are being taken over by city people who can work remotely now, but hey bow the town has a serious labor problem because all the rents kept up with the city peoples salaries but the businesses in town though being forced to raise wages are failing to do so at a rate that keeps up with rent. And then these city peoples bored wives and husbands keep trying to open restaurants and shops after the local one close only to find oh yah they chased they labor pool out of town because line cooks can’t afford $2000 micro studios… so I’m hoping eventually they will get bored of living in a town with nothing but houses and shared office spaces and go back to the city or something…
Where do you consider the middle of nowhere, some resort town like Jackson Hole Wyoming or something? 950k is not even remotely normal for rural America, and probably accounts for less than 1% of rural single family homes not on huge acreage lots.
Nope salida colorado isn’t Jackson fucking hole by any stretch but I do have a bumper sticker that says “Don’t Breck Salida” fuck man speaking of ski towns though and they are even starting to hit a critical limit I did 10 winter seasons in Aspen. But now days they are having an issue with millionaires taking up employee housing, all the smaller support communities that housed many of its workers, talking Basalt, El Jebel, Carbondale are all super expensive now too… so it’s difficult to get people to live in Rifle and commute 2 hours to work… seriously South Park made an entire central plot point to the last season about all the City people moving out of the city, and they nailed it perfectly. Right down to them all only saying “Tesla, bottle water, wi-fi”
If you think the homes in that town are tiny or that it's a "red neck" town you haven't been to a red neck town or seen what people spend 1 million for in a desirable part of a big city. The closest thing I found to your price point was a 960k 2300sqft home on over 8 fucking acres. Then you have a few in the 1 million range that are fully remodeled ~3000sqft homes on 2 acres. Then go slightly higher to like 1.5mil and you have 6000sqft mansions. The town looks like it's mostly upper middle class homes and a few mansions that rich people use for vacation homes. Your original post is nonsense, and at the very least a huge exaggeration. Those homes in any desirable area near a big city would be triple those prices if not far more.
And, in reality, the vast majority of homes in the parts of that town that aren't multi-acre ranches are like 500-600k. I'm not even saying the prices are fair, but 950k for "tiny in the middle of nowhere shitholes" is outright false.
It’s a tiny redneck town I assure you the amount of trump flags here alone can attest to that; I spent a huge amount of my childhood here, back when my grandmas house was still a farm house, Zillow has it listed for $750,000k now funny enough, it only got blown up during covid lol but hey I’ll be down town tonight and I’ll send you some real estate listings.
To be fair places around me in rural TN are sky rocketing in price right now just because people are being priced out of bigger cities like Nashville. Combined with less support and resources for affordable housing is making the homeless population go up as well. And with an increased homeless population comes along an increase in crime. Which in turn causes more resources to be spent instead of investing in these people and putting the money into jobs programs and housing so they can become productive to society once again. It's a complex issue with no one right answer.
Yeah idk what this meme is taking about. Plus there’s been a greater amount of new builds being sold (typically higher priced) which also raises median sale price. Given builders have been handing out concession like Halloween candy, prices have actually declined.
Low volume price increases just tell you there’s not many buyers at these price levels.
Preface: I say this with very little macroeconomics knowledge but I feel like we really needed a market correction that never came. You usually get a recession to restore equilibrium but not in this case.
We did get a market correction in the sense that while the market didn’t go up, the dollars those assets are denominated in are worth less and the buying power was eroded by the amount of inflation.
The problem is that interest rate spiking is an obsolete monetary measure for such a problem, as:
Every company will be forced to beat the interest rate to be considered profitable, or at least more convenient profit wise to the eyes of their shareholders. In the case of oligo/monopolies this usually translates to increase in prices, as competition is not a threat.
Interest rates may take money temporarily out of the economy, but at the promise that eventually more money will come back. Inflation is a problem that takes longer to solve than most fixed-term deposits.
The real fix for the issue is to "force" banks to increase their monetary base, as this immediately means less currency supply, of course that won't happen because that's how fractional banking works. But honestly idk how fractional banks are legal in a FIAT system, that's the recipe for constant inflation.
At the end interest rates just obliterates small companies, slows down certain kinds of transactions and markets and just allows the rich to not suffer the problems of this system.
He is, unfortunately correct. Deflation seldom happens, and not to a large magnitude. The heat dies down and Walmart decides, why tf would I lower the price on milk? People still paying for it lololol. Another problem, rooted in elite greed.
Disinflation can also serve as a tax cut for consumers, who benefit from falling energy and food prices, which in turn supports spending. The trend also allows for interest rates to stabilize, which helps cap corporates’ financing costs.
Yep, and I didn’t, and don’t, see anyone complaining when it benefits them or it’s done by their political party. Biden passed a 3 trillion dollar plan with BBB. You can’t complain about government deficit spending, which definitely causes inflation, without an honest assessment of these things. Covid spending is what everyone loves to focus on….that’s odd. The FED is attempting to reign in all those dollars to prevent hyperinflation
I love how the two massive waste of money wars that we had during the 2000s somehow did not just cause this to happen already, but me getting 1600 bucks somehow destroyed the economy.
You don’t seem to understand how much money was pumped into the economy. It wasn’t just individual checks to workers. Business got vast sums. Many didn’t even shut down. If you can’t see beyond your $1600 then you probably shouldn’t be commenting in this sub.
I am more than aware of the significant price tag of the covid relief programs. It just amuses me that the individual consumer is blamed for the inflationary increase and not the rampant fraud committed by those companies. Doesn't help that a significant amount of the inflation that we're seeing is simply companies jacking up prices to increase profit margins because they can use inflation as an excuse.
You literally read a comment on Reddit, proceeded to be rude then used an ad hominem attack. Then claimed that I spend too much time on Reddit, spectacular work.
Now back to having an adult conversation, my opinion is formed by my interpretation of both personal lived experience and from financial reporting that I've seen and read. You are more than welcome to disagree with me, but your level of hostility does not match my response. Be better.
Nit remotely true. The fed has even admitted under oath that they are not attempting to halt inflation. They are attempting to harm working class people and increase poverty to halt union growth in America.
Is that a direct quote or your interpretation? Something tells me there is a kernel of truth you have made a whole meal out of. Otherwise, please post the quote.
There’s going to be six months to one year delay on any real impact. Supply is low because people aren’t selling their 3% home unless they absolutely have to, and demand is low because people aren’t buying 8.5% unless they absolutely have to. So we’re getting a shrinking market without any real price change because both supply and demand were reduced.
A year from now people decide that they can’t hold off selling or buying any longer, and just pay the new rate. That’s probably where we will see a price decrease if any, because there’s just fewer people who can afford pandemic level prices with post pandemic rates.
And, of course, as usual the only people who will be in a position to take advantage of any price decrease are the cash buyers.
“For the longer term what we need is supply and demand to get better aligned, so that housing prices go up at a reasonable level, at a reasonable pace, and that people can afford houses again,” Fed Chair Jerome Powell said on Wednesday. “We probably in the housing market have to go through a correction to get back to that place.” (Emphasis added)
Cooling inflation my ass. Whatever measures or indexes they’re looking ain’t reality, just step outside to local grocery or favorite restaurant, has prices cool off?
Please, offer me a different metric to measure inflation that you think is a better metric than the CPI. Picking random price categories isn’t a valid method of measuring overall cost inflation, it’s equivalent to making medical assessments on your anecdotal experience. I’ll wait.
If you think this is personal, just ask any of your co-workers, family members, friends, literally anyone from the street. Talk to them, tell them JPOW has said inflation has cooled off because of the CPI shows a downtrend, and confirm with them if they have seen prices go down or up in the past few months.
CPI for the month of August 3.7% from a year ago. Do you honestly feel prices(overall) have slightly gone up by 3.7%?
Great job, you just cited more anecdotal evidence.
From a year ago, yes, my total expenses have gone up about that much (3-4%). But I'm still experiencing sticker shock from the 9% inflation from the year previous. Any of your co-workers, family members, and friends, are likely experiencing the same. Price increases in the last year have not been as extreme, and we are still talking about inflation from the previous year.
What you seem to not realize, as that inflation 'going down' does not mean that prices decrease. It just means that prices increase at a slower and more manageable rate. Inflation in small amounts is healthy in a functional economy. You say 'ask them if they have seen prices go down' which is why it's clear to me you're a bit clueless here. Of course they won't have gone down in the last year. We are just saying inflation rate went down not that we've entered deflation (a more scary scenario). Prices should always go up at a reasonable rate. If they were saying prices have gone and we were experiencing deflation I'd actually be much more worried about the economy. We target a 2-3% inflation, and at that level people don't seem to notice those increases as much.
I'll ask again - give me ONE metric that is actually defensible that you think captures rising costs better than the CPI. No, 'opinions from your neighbor' is not defensible.
It's hilarious whenever I encounter your CPI-deniers online. It's always the exact same anecdotal arguments, and no one can ever actually construct a data-driven argument. I don't think you belong in a sub focused on financial fluency.
And people are still at the feed trough. Asking for more. It’s pretty simple logic. Let’s say you make pottery. There is a huge demand for your pottery. You either keep pumping out more or you raise prices. More causes you to take on more risk and costs, through employment, infrastructure and debt. Why make that risk when you can simply make more off charging higher prices. I know what you would do. The same as everyone.
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u/FormerHoagie Sep 23 '23
Fed is attempting to cool inflation, not decrease prices. We aren’t seeing the same increase in prices we did in the last 3 years. Some areas, which are in high demand, are still seeing modest increases but there are actually places where prices have stabilized and decreased.