The article criticizes economists and their understanding of inflation, arguing that their focus on controlling wages and putting workers out of jobs to curb inflation is flawed, and that the real issue lies in the lack of competition and the pricing power of big businesses.
The blog emphasizes that the war on inflation has been won and that a recession is coming, as indicated by various indicators such as CPI, recession probabilities, freight industry performance, and weak retail sales. The post also highlights the struggles in China's economy and suggests that investors should buy bonds.
India's finance minister, Nirmala Sitharaman, prioritizes taming inflation for sustained economic growth but highlights that using interest rates as the sole tool to tackle inflation has limitations, emphasizing the need to address supply-side factors as well; she also stresses the importance of boosting investments and diversifying supply chains for global economic recovery.
A surge in services inflation is expected, driven by the recent rise in the stock market, with prices of portfolio management and investment advice services likely responsible for most of the increase.
Professor Isabella Weber's theory of seller's inflation, which argues that firms are passing on cost increases to consumers and benefiting from higher profits, has provoked controversy among economists and attracted attention from major media outlets. Weber's analysis challenges traditional economic theories on inflation and highlights the role of profits in driving price increases, potentially shifting the focus of policy measures towards addressing the power dynamics of capital in the market.
Economists at the Chicago Fed argue that recent rate increases have brought inflation on a path to 2% without causing a recession, creating a "goldilocks" scenario for risk-taking in financial markets.
The article discusses how the rate of inflation has impacted processors, distributors, and other middlemen, with some benefiting from price increases but now at risk of a slowdown.
Stronger-than-expected U.S. economic data, including a rise in producer prices and retail sales, has sparked concerns about sticky inflation and has reinforced the belief that the Federal Reserve will keep interest rates higher for longer.
Higher-than-expected inflation has triggered a 'reflation trade' in markets recently, but the increases won’t last and investors should take heed.
"Inflation expectations can influence actual inflation, as people's behavior and attitudes towards the economy play a role in price changes," according to Joanne Hsu, director of the Surveys of Consumers at the University of Michigan.
