Inflation Is Slowing, But More Pain Is Coming

m.knox

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Aug 20, 2003
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Courtesy of the Biden administration.

Remember when king dolt NJ kept barking "SUGAR HIGH" when it came to the TCJA? Now you are seeing and feeling a real SUGAR HIGH.....

https://www.msn.com/en-us/money/markets/inflation-is-slowing-but-more-pain-is-coming/ar-AA118xIn

“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Powell said in a sober eight-and-a-half-minute speech. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain."

The operative word here is greater. In the eyes of the world’s most powerful central banker, there is no good solution here. Powell’s main tool right now is raising interest rates, and the Fed has recently hiked interest rates at the fastest pace in about 40 years. Powell made it clear that he is going to keep on sucking money out of the financial system until inflation is good and dead. But this comes at a cost: Businesses will find it harder to expand, consumers will be less likely to spend, and layoffs are probably going to keep rising. The odds of a coming recession are still high. As far as the Fed is concerned, this is the lesser evil.