How worried should you be about inflation?

                                                           

How worried should you be about inflation?      July 14, 2021   Today's Top Stories From the Breitbart News Desk How worried should you be about inflation? In a heartening demonstration that hope springs eternal, Fed chair Jay Powell went before Congress today to say that despite the Consumer Price Index and Producer Price Index coming in much hotter than expected, he remains untroubled. Sure the Fed underestimated the power of the inflationary forces that the combination of zero interest rates, $120 billion a month in bond purchases, and a promise to ignore inflation would summon forth from our darkest path. But the public should "have faith," as Powell put it, in the Fed's ability to stomp down inflation if things get bad enough. There are two problems with this. First of all, Powell's term ends early next year. So even if he would be the inflation fighter he promises to be, we do not know if he'll be around to get things in motion. A Biden appointee who replaces him would be extremely unlikely to hike rates in an election year no matter how bad inflation got. Second, while it is probably still true that the Fed can effectively fight inflation, the history of this is not really all that comforting. All too often the Fed has had to throw the economy into a recession to stifle price hikes. Coming so soon after our pandemic-lockdown recession, another downturn would be economically traumatizing. On the other hand, Powell's policy is likely good for the stock market. Recall that equity in a business is a real asset, a category of things whose value tends to rise in inflationary periods. When stocks don't rise in an inflationary period, that's typically because investors anticipate higher interest rates, which lowers the value of discounted future cash flows that the textbook tells us are the bedrock of stock values. But if you get inflation plus a promise that rates will stay low, well that's very good for stocks. – Alex Marlow & John Carney Breitbart News Network     TOP STORY   Defiant Powell Tells Congress to 'Have Faith,' Says Stimulus Will Continue, Predicts Inflation Will Subside Federal Reserve Chair Jerome Powell struck a stance of cool defiance when it comes to concerns over inflation surging. Powell said Wednesday that he expects inflation, which has been rising by much more than expected for the past four months, "will likely remain elevated in coming months" before "moderating." This is an indication that the Fed is not ready to change course from its declared plan to keep rates low for an extended period of time even though growth and inflation are running hotter than expected. [Click here for more]   IN OTHER STORIES... Atlanta Fed's Business Inflation Expectations Remain Sky High The inflation expectations of businesses in the southeastern U.S. dipped in July, indicating that some inflationary pressure may have come down in recent weeks, data from the Federal Reserve Bank of Atlanta said Wednesday. The Atlanta Fed said that companies year ahead expectations for price increases "decreased significantly" from 3.0 percent to... [Click here for more]   Producer Price Inflation Surges 7.3%, Higher Than Expected Prices received by U.S. businesses for goods and services rose by much more than expected in June, the Labor Department reported Tuesday. The Producer Price Index rose 7.3 percent in June from 12 months earlier, the largest demand since 12-month data... [Click here for more]   Citigroup, Wells Fargo, and Bank of America Report Profit Surge as Biden's Inflation Crushes American Workers Citigroup, Wells Fargo, Bank of America, and investment firm BlackRock reported increased earnings Wednesday, while everyday consumer goods prices have increased due to President Joe Biden's inflation. Bank of America earnings per share soared 111 percent to 78 cents, and Wells Fargo earnings surged 247 percent to 97 cents a share, as Citigroup earnings per share are set to increase... [Click here for more] FOLLOW

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