It’s inflation week here in the United States and things are not looking good. We will start with the New York Fed’s monthly Survey of Consumer Expectations…(NYFED)
- Inflation expectations for median one-year and three-year-ahead remained unchanged in December at 6.0% and 4.0%, respectively.
- Median home price expectations increased to 5.5% from 5.0% in November.
Consumers expect wages to grow at 3.0%, up 0.2% from November. This means that consumers believe that prices of goods are going to outpace their wages. Not a recipe for a great economy…
Bloomberg reported on Monday that the widely followed consumer price index is forecast to rise 7.0% for the year through December and climb 0.4% from a month earlier. “The following day, another Labor Department report is projected to show prices paid to producers surged nearly 10% in 2021…” (Bloomberg)
Spiking inflation is undoubtedly why Goldman Sachs now believes The Federal Reserve will likely “raise interest rates four times this year and will start its balance sheet runoff process in July…” (Bloomberg)
- FYI: The seeds are being planted for a March rate hike. “If you’ve got an economy that continues the levels of unemployment that we’re living through now, which of course is very healthy, with price pressures elevated, I think according to our mandate and framework, we need to move toward normalization,” Mr. Barkin said…I certainly think it’s conceivable” the Fed will be able to lift rates at the March FOMC meeting, he added.” (Wall Street Journal)
A new poll finds that twice as many Americans are worried about inflation (24%) than were worried about it last year…(Associated Press)
The Biden administration continues to blame greedy corporations while liberal economists “both inside and outside the administration split over whether monopoly power accounts for the spike in inflation facing the nation.” (Washington Post)
Other than that Mrs. Lincoln, how was the play…