Attention Economy


Tuesday, May 11, 2021

Monetary Policy Errors, Asset Bubbles, and Inflation Risks

U.S. Consumer Prices Jump Most Since 2009, Outpacing Estimates
https://www.bloomberg.com/news/articles/2021-05-12/consumer-prices-in-u-s-increase-by-most-since-2009
“The annual CPI figure surged to 4.2%, the most since 2008 though a figure distorted by the comparison to the pandemic-depressed index in April 2020. This phenomenon -- known as the base effect -- will skew the May figure as well, likely muddling the ongoing inflation debate.
While Federal Reserve officials and economists acknowledge the temporary boost, it’s unclear whether a more durable pickup in inflationary pressures is underway against a backdrop of soaring commodities costs, trillions of dollars in government economic stimulus and incipient signs of higher labor costs”.

The Fed is Playing with Fire
Clinging to an emergency policy after the emergency has passed, Chairman Powell courts asset bubbles.
https://www.wsj.com/articles/the-fed-is-playing-with-fire-11620684980
 
Markets Are in for an Interest-Rate Surprise
https://www.bloomberg.com/opinion/articles/2021-05-10/markets-are-in-for-an-interest-rate-surprise

Two Big Things You Need to Understand About Inflation
https://www.bloomberg.com/opinion/articles/2021-05-11/debt-makes-the-fed-s-job-harder-if-inflation-accelerates
 
Will the inflation spike be temporary?
https://thehill.com/opinion/finance/551466-will-the-inflation-spike-be-temporary
 
Is the US housing boom a cause for concern?

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