Since the Fed is keeping emergency pandemic-level interest rates on the floor, with no end game in sight, you are seeing commodity prices skyrocket. But it’s all transitory, so says the Fed. Have you tried to buy a house lately? Or what about your trip to get gas? Last, how is that trip to the grocery store going? Do you think those prices are transitory? Didn’t think so.
Be careful what you wish for. Today’s reading of CPI (up .8%, for a month) should please Fed officials that their debasing of the dollar is working. This unelected cabal of bankers seems to forget inflation is regressive and hits the poorer socio-economic class harder than those with means. Hey, but this too shall pass.
Eventually, higher prices eat up discretionary income, let alone those items of necessity, as noted above. Despite the Fed’s continued QE, interest rates are going up and will begin to act as a double whammy on the economy, most notable housing, along with related-industries, comprise nearly 20% of our GDP.
Nonetheless, hold onto your pocketbooks, especially when higher taxes come knocking. Chances are, things will work out fine, as the Fed predicts. Then again, maybe they won’t. If so, here comes an economy slowing down and the cry of ‘Timber”.
