“Companies figured out they do like to raise prices. But we also hear a lot from companies these days that consumers have really had it with price increases.”
By Wolf Richter for WOLF STREET.
At the press conference following the meeting when the Fed pivoted to wait-and-see, Powell was asked multiple times from various angles about future rate cuts. In responding, and even on his own when not responding, Powell mentioned five times some version of “we do not need to be in a hurry” to cut, and eight times a version of “we need to see further progress” on inflation before cutting further.
For example, “With our policy stance significantly less restrictive than it had been, and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance.” This is the definition of wait-and-see.
When asked, if a “March cut” is still on the table: “The broad sense of the Committee is we don’t need to be in a hurry to adjust the policy stance. Your second question was?”
He nailed it with this one, the inflationary tug-of-war right now: “We just came through a high inflation period. You can argue that both ways: Companies have figured out they do like to raise prices. But we also hear a lot from companies these days that consumers have really had it with price increases. So I don’t know how that shakes out.”
Our policy is working: “Our policy stance is very well calibrated to balance the achievement of our two goals. We want the policy to be restrictive enough to continue to foster further progress toward our 2% inflation goal. At the same time, we don’t need to see further weakening in the Labor Market to achieve that goal. That is kind of what we have been getting.”
But we’re not there yet. “We would want to see further progress, but we think our policy stance is restrictive, meaningfully restrictive. Not highly restrictive but meaningfully restrictive. So, I think we need to see further progress.”
Inflation on top again: “We want the policy to be restrictive enough to continue to foster further progress toward our 2% inflation goal. At the same time, we don’t need to see further weakening in the Labor Market to achieve that goal.”
“You can take away from all this, we remain committed to achieving our 2% inflation goal sustainably.”
No timeline to end QT, not even close: When asked if the Fed discussed at this meeting a timeline for ending QT, he brushed it off. Remember, the purpose of the Fed’s QT is to bring reserves down. But reserves haven’t dropped since QT started. All QT has come out of ON RRPs so far. ON RRPs have dropped by $2 trillion, and are down to $100 billion. But reserves are still untouched at $3.3 trillion and might need to drop by $1 trillion or more before they’re down to the Fed’s goal of just “ample,” which is below “abundant,” and currently, reserves are still “abundant.”
When money market rates, such as the Effective Federal Funds Rate (EFFR) and the Secured Overnight Financing Rate (SOFR), become jumpy and surge during regular trading away from quarter-end or year-end turbulence, then this would be one of the signs that reserves approach ample. But this hasn’t happened yet.
So here is what Powell said in response to the question about a timeline to end QT:
“Reserves remain roughly as high as they were when runoff [QT] began, and the federal funds rate has remained steady in the target range. We track a bunch of metrics, and they do tend to point to reserves being abundant. We intend to reduce the size of the Balance Sheet to a level where we can manage it efficiently and effectively in the ample-reserves regime. We are monitoring a range of indicators to assess conditions that could be somewhat above ample. I don’t have anything to say to you about particular dates. That is the process, and what we see is that reserves do appear to be abundant.”
High stock prices a reason for not cutting rates further? When asked if relatively high stock-market valuations factor into the rate decision, he said:
“We look at it from a financial stability perspective, asset prices generally, along with things like leverage in the household sector, leverage in the banking system, funding risk for banks, and things like that… Yes, I would say asset prices are elevated by many metrics right now. A good part of that, of course, is this thing around tech and AI. We look at that mainly from a financial stability perspective.”
But we can let her rip? “There is a lot of resilience. Banks have high capital. And households overall are in pretty good shape financially these days, so that is how we think about that [high stock prices].”
“Waiting to see” the administration’s policies. “The Committee is very much in the mode of waiting to see what policies are enacted. We don’t know what will happen with tariffs, with immigration, with fiscal policy, and with regulatory policy. We are only just beginning to see, and actually are not beginning to see much. I think we need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be.
“So, we are watching carefully. As we always do, this is no different than any other set of policy changes at the beginning of an administration. We will patiently watch and understand, and, you know, kind of not be in a hurry to get to a place of understanding what our policy response should be until we see how it plays out.”
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Jabbering Jerome.
Pull the cord at the back of his neck and he will say the funniest things. Over and over.
“We need to see further progress”.
“It’s transitory “
“Navigate a soft landing “
The last time they really saw progress was September. When they gave into pressure and cut rates.
Not very inspiring. We have a K shaped economy…. The rate decreases did not help the lower side with lower mortgages rates or any other financial gains, but the upper side had plenty of money to put in the stock market and bitcoin.
The train wreck is still coming, they just pushed it down the tracks a little further. And the landing won’t be soft for most people.
So Powell is in no hurry to take away the punch through QT. Guess he loves watching the drunken sailors engaging in huge Blockchain orgies.
No federal budget, no debt ceiling resolution, and no funding set for mass deportation, plus tariff wars and the expiration of 2017 individual tax credits in twelve months means that waiting makes sense.
Cutting rates now would be gasoline on the inflation bonfire.
When I bought some roofing materials this week
There were 3 separate notices from different companies
RAISING PRICES 10%(each one like collusion) on April 1st(april fools)
like clockwork now
and with gas about to go up .50 cents gallon or more – expect fuel surcharge
going back many decades jd, construction materials went up twice a year, or even sometimes down…
April in the spring, and then six months or so later…
One time, the rise in April was so large many projects I was working on that they were either canceled, or put on hold waiting for prices to go down: these were projects with train loads of lumber, and similar quantities of concrete and steel and finishes such as roofing, plaster or drywall, flooring, etc., many of which had also seen dramatic rises…
“gas about to go up .50 cents gallon”
What makes you say this? The oil prices have already hit a ceiling because of ultra cheap natural gas. I don’t see how oil has any room to run in price.
March is most likely a pass as well but will firm up or see chatter die out for a May rate hike. If headline moves up to 3.2%, they won’t be able to sit around another 3-5 months twitting their thumbs acting like inflation v2.0 is “transitory”. This will also align nicely with the first 100 days of Trump’s roaring start giving the Fed an idea how & when policy will begin to impact inflation either up or down.
I don’t get the impress that this administration cares about inflation.
Impression.
At the current rate of QT who would think we’re “close”???
Wall Street. You haven’t been paying attention.
Is the Bear waking up? 🐻
Lol
Thanks for this article Wolf, since my last comment I have been following these at the FRED. It seems with stable policy from the Fed, its easy to see where we begin to have a problem. We simply add thQT to the governments deficit borrowing and calculate how long it takes to reach say 1.2 trillion. IM guessing withing 8-10 months we are going to be in need of a new round of QE and that is before when the market will crash to make the FED do so. Can you recommend a good concise and intelligent textbook to someone looking to understand the ins and outs of central bank and bank finance? something that would cover all the bases in say two evenings reading.(assume a very high rate of reading)
People have been saying this stuff since June 2022, right here on this website, dragged in from other places that said that the Fed would be “forced” to restart QE by September 2022 because of yada-yada-yada reasons. And then the “forced to restart QE” kept getting moved out, and it’s still showing up, which is kind of funny by now.
But you don’t understand how bond markets work. There will always be demand for Treasury securities at the yield it takes to sell them. That’s what yield does, it creates demand. That’s why yield exists.
Well it stands to figure the earlier calls, not mine, were completely unreasonable because of the money in bank reserves and rrps. but when both are at minimum functioning levels, on the lower border of adequate for bank reserves, long rates would need to spike a LOT to attract dollars, and that spike would neccessitate stock market repricing. Moreover a lot of the money going into wouldn’t be so readily available .
Viraj Shah
Reserves are still $1 trillion-plus above “ample.” So if the Fed wants to remain within its “ample reserves regime,” it can shed at least $1 trillion more, to bring total assets down to $5.8 trillion or less.
If the Fed wants to return to its “scarce reserves regime,” which it used to have between 1912 and 2009, it can shed a whole lot more, but will have to re-institute minimum reserve requirements for banks, like it had until 2020, such as 10% of their deposits.
Under the scarce reserves regime, the Fed supplied daily liquidity to the banking system as needed via overnight repos. And during a crisis, such as 9/11, it would open the spigot for overnight repos for a couple of weeks to get markets to function again, and then step back. Overnight repos mature the next day, and if they’re not rolled over, they’re gone. They don’t stick on the balance sheet for years, like QE bonds. The old system worked very well and kept the balance sheet to a minimum. Gangster Bernanke shifted away from it. It would be a good idea to shift back to it, but VERY SLOWLY, over years.
The Treasury market will be just fine. Yields will be higher, and Congress might finally tackle the budget deficit. The only entity that can crack the whip on Congress is the bond market. But we’re a million miles away from it, with 10-year yields at 4.5%. If 10-year yields are at 10%, while inflation is 8%, that is the bond market cracking the whip, and Congress is going to cower and cut the deficit.
Good for Powell!
In six weeks, who is in charge of policy?
Nobody.
Too much liquidity in the system. Fed slowed down QT too early last June. They should have waited until reverse repo is zero.
RRPs will never go to literal zero. Some counterparties just aren’t willing or able to lend in private repo and would rather accept a slightly lower rate from the Fed.
TESLA Profit Falls Sharply…
Slide 70%!
Tesla made a lot more profit than GM.
In Q4:
TSLA: +$2.3 billion net income
GM: -$3.0 billion in net LOSS 🤣🤣🤣
Tesla makes better cars than GM.
Yes, with enough subsidies just about anyone can!
Depends who you talk to.
Define “better”?
26% of Tesla’s reported earnings were due to unrealized gains on its Bitcoin holdings.
So take that out, and even then, Tesla made more than GM.
I was responding to the stupid context-less headline that SoCalBeachDude had posted here, to point out that it was stupid and context-less.
Regarding the comment below: “Yes, with enough subsidies just about anyone can!”
I don’t think Tesla actually needs the subsidies. Of course they will take them when offered. Tesla probably actually becomes more competitive in the EV space as subsidies are phased out.
To a degree I think Musk is loosing interests in EV’s and is already pivoting elsewhere where he still retains an edge over the Chinese.
Batteries and ubiquitous charging networks remain the stumbling block. Batteries will be solved but only with time and investment and who will invest if they can’t out-compete the Chinese.
Charging networks will depend on finding someway to make them pay at the gas station/convenience store level.
Sorry I wasn’t more clear about it, I didn’t mean my comment to be any sort of remark as to Tesla out-earning GM.
It was more of just a side comment to the effect of what a crazy world we live in that over a quarter of a car company’s earnings were due to fluctuation in the price of Bitcoin.
Due to a write-down of their Chinese joint venture in Q4. Prior year was a couple billion. Tesla’s growth is now like every other car company. Zero.
Nobody cares about cars when it comes to Tesla. It’s a story stock. It’s all about Optimus and autonomous vehicles going to Austin in July. Not cars. Musk’s forward looking guidance: 10 trillion in revenue and larger market cap than all other mega caps combined. Buy the dip!
Now that he runs the SEC, he can truly say whatever and not even get his fingers slapped.
lol
Think hell make a bid for tiktok? OR will gates get to it first?
That’s OK Powell.
We love hyperinflation. We love not being able to afford groceries.
My family is happy to starve if it helps wall street make profits. Go ahead, Arthur Burns. Cut rates to ZIRP-NIRP.
They’re playing a very dangerous game with hundreds of millions of peoples’ lives, favoring bloated asset prices over living standards. It could end very, very badly for them personally if things go sideways. Any county can fail and descend into chaos.
What groceries are expensive to you? There is abundant inexpensive healthy food at walmart, like oatmeal 40oz. for $4. Plenty of healthy fruits and veggies so cheap, like one dollar a pound, that they are practically free compared to the benefit they give, like carrots, potatoes, cabbage, roma tomatoes, russet potatoes, papaya, bananas, apples, grapefruit. Dry rice and beans very cheap. You can cook a lot of rice and beans extremely easily in a pot or slow cooker. You can find other sources of protein besides eggs. We are very lucky to have this much cheap abundant food because that could change and we could find out what real food insecurity that people in other parts of the world have suffered with. It’s rents that are way overpriced, and yes that is Powells and the Republicans and Democrats fault because they created conditions for a speculative frenzy in real estate by pushing down mortgage rates with money printing.
Today Powell reiterated FED’s commitment to 2% goal. He clearly stated that (changing 2% target) is NOT on table for Policy framework review. He said same message few times. “I would not look at it anyway. Even if Central Bank want to look at it, it is best not to do it when you are not meeting the target. I mean certainly there is NO interest to change it at all if I am being unclear. We are NOT going to change the Inflation Goal”. In between he even laughed little bit like why the hell I have to repeat so many times…
How much more clear he needs to be to Wall St babies (Read CNBC hosts/talking heads, El-Erian etc) who have been asking to increase target to 3%.
Wolf wrote about this in a comment under the other article he published yesterday. Quoting him here:
“There was another thing Powell said today right up front in that vein: The Fed will not review its 2% inflation target during its current discussions of its monetary policy framework, which it does every 5 years. This moved (again) the issue of raising the inflation target off the table. Raising the inflation target would be a horror show for the bond market.”
Walk Street and many other interests certainly want to increase the targeted inflation rate to 3%. After all, it’s important to keep asset prices and the housing market elevated and prosperous so that the Wealth Effect continues. 4% inflation keeps the wheels greased, keeps things liquid and moving. In fact without healthy 5% inflation there could be a dip in the employment numbers or even a recession! And we certainly don’t want that. Yes sir, a well defined 6% target keeps the Fed humble and on board, and there’s no need for a strong stock market to falter. This country will do well and prosper with a realistic 7% inflation target and that’s what Wall Street KNOWS the central bank will support.
I like it. Get the auctioneers involved.
That’s true, 2% is their target, and we all know that’s more like 4-6% in real world spending, non-hedonic-adjusted cash, depending on how you spend your money.
Hi Wolf. Any thoughts on claims of Fed on employment numbers and the BLS downward revisions? Will the downward revisions come back to bite the Fed? Thanks
LOL, you never read anything here, do you? Just dropped by to dump some garbage you picked up on the internet?
1. The last few revisions were UPWARD revisions, and these UPWARD REVISIONS bit the Fed after its 50-basis-point cut. We’ve discussed this here endlessly, including in the rate article yesterday morning.
2. in February, there will be HUGE UPWARD REVISIONS because the 9 million immigrants will finally be included in the data. READ THIS:
https://wolfstreet.com/2025/01/10/this-strength-of-the-labor-market-economy-amid-re-accelerating-inflation-puts-the-fed-back-into-wait-and-see-mode/
Thanks for the clarification, Wolf. I don’t claim to be an expert and come here to get a perspective from your experience.
Tbh, the Fed sounds very reasonable at this point
Wait until Powell’s bottom meets Trump’s ruler. It wasn’t pretty when that happened in 2019. Powell bent the knee by restarting rate cuts in 2019.
But back then, inflation was BELOW the Fed’s target, and the Fed had hiked preemptively to forestall potential inflation. That’s different than today where inflation is well above target, and has stopped coming down, and consumers are pissed off about inflation and kicked Biden out of office because of it. Trump ran on that anti-inflation anger. He’s a smart guy, he likely doesn’t want to deal with Trumpflation.
Trump cares more about a potential slowdown then Inflation, hence his jawboning the fed.
As I watch Chair Powell in words and deeds ( with an assist from Wolf’s perspective) I am reminded of what the Abolitionist said about Abraham Lincoln:
“He is a First Rate, Second Rate man”
I love this fed.
This fed loves me.
They treat me like a VIP.
As they fire up the presses and print the dollar more,
My Gold and silver will surely soar.
Inflation at my local Safeway is still pretty high.
I figure that inflation is 6%, which means that the
Real Fed Funds Rate is something like -2.5%
Really. Inflation-adjusted interest rates are negative,
and inflation-adjusted mortgages are at 1%.
This sure does not like tight money to me, and it sure
does not look like Time To Cut Rates.
1. Safeway has turned into a rip-off store. We minimize our shopping there. Some things are 50% to 100% more expensive than at Trader Joe’s, Costco, and online. I don’t know how Safeway gets away with this without losing its customers. Maybe people like you just blindly buy there and complain about inflation, instead of looking at the competition. Or maybe Safeway is all you have (monopoly), and they’re ripping you off because of it. Check out what’s available in your area online. It might open your eyes.
That said, food inflation (beyond the avian-flu caused eggs shortages and price spikes) is starting to tick up again, after having been calm for about a year. I noted this in my last CPI article:
https://wolfstreet.com/2025/01/15/beneath-the-skin-of-cpi-inflation-yoy-cpi-2-9-yoy-worst-since-july-mom-cpi-0-39-4-8-annualized-worst-since-february-core-cpi-stuck-for-7th-month-at-3-1-3-3/
2. “Inflation-adjusted interest rates are negative, and inflation-adjusted mortgages are at 1%.”
That’s just plain BS.
On top of the high prices, and poor quality of it’s food, Safeway has some of the rudess employees in entire industry. I’ve stopped shopping there altogether.
I think that is why Aldi’s is expanding and since I started going there 10 years ago, they are getting busier YOY. Aldi plans to open more than 800 new stores in the United States by the end of 2028.
Also, Lidl is expanding in the U.S. too. These Eruopean based grocery stores see that they can have lower prices and still make great profits.
Couldn’t agree more about Safeway. There’s one hack though if you’re desperate and Trader Joes’s doesn’t have what you want or they’re out (which they often are). Go to the Safeway website and look for deals in their Safeway 4u category and also clip their digital coupons. All you do is plug in your phone# when you’re checking out in store. Last week a small cheese block was discounted (if you clipped the coupon) from $5 to $1.97 no limit. The regular price is typical Safeway gouging of course, making the deal look better than it is. One woman was sighing at their price of lemons as I walked by and I told her they were $1.50 less at Trader Joe’s, just down the street. SMH🤷🏻♂️
Really interesting about Safeway, I thought it was just a neighborhood thing and they were offsetting rising costs of theft in a reasonably affluent location.
They are a little bit closer than my alternative store, but this is likely to accelerate my desire to shop elsewhere even more!
Agree with you 100%, all the people complaining here about Safeway, don’t know how to shop at Safeway. You don’t go there with a shopping list and buy everything on it. You should be checking for the deals and clip the coupons then go in and buy the deals. Then go look elsewhere for what you need that you didn’t get. Safeway’s deals beat Costco every time. Costco is just as big of a rip off as Safeway, just you don’t notice it because you think you are getting more for your buck. When in reality you are just paying more for the same thing. You should be shopping for your groceries at stores pushing out coupons then you’ll actually save money comparatively. Only thing cheap at Costco is the gas.
John,
“You should be checking for the deals and clip the coupons then go in and buy the deals.”
LOL, you’re the perfect drunken sailor, buying what the STORE wants you to buy, instead of buying what YOU want and need to buy.
You should get an award from Albertsons Companies [ACI] which owns Safeway.
if you see that Safeway wants to rip you off with the product that YOU want to buy, you go buy it at another retailer or on line for less. That’s how you should shop. That’s how you stop inflation. If Safeway loses enough sales, it’ll roll back those price increases.
In Chicago I would shop the deals at Jewel, Walmart, Aldii’s, Caputo’s.
Rotate. Also hit Sarellies deli for a bucket of Italian beef and Natollis deli for subs, Italian sausage, imported provolone, pepperoni. Ravioli and occasional pan of lasagna.
I supported the mom and pop deli and the others didn’t make to much money off me.
I did find when out of town, Safeway, to be a ripoff
Good stuff. I split my buys between Whole Foods (which now is no more expensive than others on most/many things), Trader Joe’s, Aldi, Stater Bros, Ralph’s and two local high end stores. I mix in Costco when saving justify the volume, and Gelson’s in a pinch. No one place has everything we need sometimes, and prices are wildly disparate.
One thing for a fact, Ralph’s (Safeway equal?) is NO less expensive than fkn Whole Foods on the vast majority of stuff.
yea maybe break up some of these companys. Create some egads competition. just an idea from a liberal.
Safeway sounds like Hy-Vee in the Midwest. Before covid they were alright, since then nothing but price gouging. $6 tubs of hummus that are 2.50 up the street, $10 mediocre pizzas, overpriced trash produce. This is a Midwest college town, not SF or NYC. If the average consumer had half a brain, their prices would fall into line or they’d start shuttering stores. People must be anxious to get rid of their hard earned paychecks.
the media is claiming powell’s statement is dovish. lol. they never stop, do they?
You can tell we are still in a ‘party until you drop’ environment when TSLA can post horrible numbers and people still line up to buy it due to Musk’s (continuing) promises.
I trust everyone here understands that the Fed (in cooperation with the Biden Admin) “engineered” the inflation impulse at COVID. It was planned and intentional.
The reason is simple: Inflation is the only real way to reduce the US debt burden as well as debt burden for everyone else. Essentially, we’re looking at a 30% reduction in debt load due to this inflation.
Powell is a smart cookie. As such, he knows that it takes time and pressure to suppress down a large inflation impulse like the one we have seen.
Also, with the Trump “wild card” now in the mix, Powell will be even more cautious on lowering short term rates. I believe Powell also is concerned enough about our fiscal deficits that he wants to help force some spending restraint via higher rates.
I think we are seeing evidence in the long bonds that continued “drunken sailor” spending (attibuted to Wolf) could easily result in even higher long rates which would be quite devastsating to the economy.
The inflation shock of 2021-2023 was not intentional. It was the unintended consequence of the intentional money-printing and deficit-spending orgy. They thought that they’d gotten away with it so far, so they’d get away with it again on an even grander scale without triggering inflation. This miscalculation (among other things) caused Biden to lose the election.
The inflation shock of those years was due to the Global Pandemic, which is why Inflation was world wide.
All major economies were dropping money from helicopters, which is why inflation was global.
You can’t still believe this in 2025.
Reply to Publius, no, Inflation was caused by the production slow down due to people sick and staying home without a corresponding demand destruction in most things. Major economies have been printing money for years with no appreciable Inflation upticks.
It was the unintended consequence of the intentional money-printing and deficit-spending orgy.
Has anything changed? We are still spending and printing just to keep the lights on.
I don’t even like gold and silver all that much, yet it seems like the best medium term bet in town.
You’re not paying attention. We’re NOT “printing.” That ended in 2021. Since 2022, we’ve been UNPRINTING, called QT.
So a lot has changed in terms of monetary policy — it switched to the opposite of what it was.
In terms of government deficit spending, nothing has changed.
maybe “not intentional” in the sense that a drunken college kid in north carolina pouring gasoline on a couch and lighting didn’t intend to kill 4 other students, but the projected results were patently obvious to many people. at best, they were extremely reckless if they weren’t doing it intentionally.
To continue with your college kid analogy: He didn’t mean to kill anybody, but it’s still his fault. Intent and responsibility are two different things. Your college kid was simply stupid and drunk enough to think it possible to light a gasoline-soaked couch on fire without anything else burning. Ditto the Fed.
pea sea, in the fed’s example, it wasn’t just stupid, it was arrogance.
for the record, the college kid thing is a real story. search for janet danahey greensboro.
A few weeks ago, the WSJ had an article about Joe Manchin telling Biden & Co that their plans would be inflationary. They told Manchin not to worry, they had 17 Nobel prize winners who said everything would be fine. Manchin shot back, saying, “you have 17 educated idiots telling you what you want to hear.”
Reminds me of the Far Side cartoon with the caption of “Eyeglass Testing Lab” with professor-types in white coats running into the brick wall of reality at full speed.
What they also missed out, there is no Nobel prize in economy. Those 17 had their prizes not by the Nobel cometee, but from Svenska Riksbanken. That is the Swedish central bank.
Manchin voted Yes for both the Cares act and the American Rescue act totalling around 4 trillion in spending. So apparently he didnt care much about inflation and his comments were just theater. The Uniparty politicians routinely say the opposite of what they do.
Curious, what would have happened if they hadn’t pumped all that money into the economy with everyone under shelter in place orders, not driving, not shopping, etc..
Probably the same thing, Inflation, but maybe not as bad. Inflation in simple terms is too many people chasing too few goods.
Oh Wolf you sweet summer child.🤷
No doubt but what about the current president. He is doubling down with there new budget no? what will happen to him?
I’m sure he’s aware of what inflation did to Biden and Carter. He might not care because he can’t run again. But Americans hate, hate, hate inflation. He ran and won on that platform. I’m pretty sure he doesn’t want to see a renewed surge of inflation.
“I trust everyone here understands”
Mike, I trust you are giving way way too much credit for 1) engineering, 2) foresight, and 3) willingness to create pain to stave off future pain, to that administration. GMAFB. Absolutely no chance your theory is accurate. They ALWAYS kick the can. Just watch, this current set of stewards of the economy and nation will do exactly that (oh, they’ll call it something else, and you’ll probably fall for it, but it’s a can kick just the same).
Rambling off course here a bit. In the last 2 months I have made 2 motoring trips and traffic has been reduced considerably. Gasoline is also lower in price. The last trip was to far south Mississippi to protect my hideaway from the great blizzard of 2025. The area was covered with 5+ inches of snow. Gasoline was $2.36 a gallon and traffic was minimal. Hotel price has dropped in my overnight stay.
So it seems to me as if some of the excess money has dried up and people are beginning to slow the spending. Maybe the Fed is on track to reduce inflation and consumer spending.
If gas could be $10 a gallon and I would experience 75% less traffic I’d love it, but alas I know that would ruin 85% of the general publics ability to travel or even go to work.
Inflation is going to hurt a good part of the population based on hold steady and see what is going to happen that’s been going on for awhile now.
“If gas could be $10 a gallon and I would experience 75% less traffic…”
Eventually the engines would just switch to run on a different type of fuel. All hydrocarbons are fungible. Just look at the falling diesel demand in China because they’re switching their long haul trucks to CNG.
“…this is no different than any other set of policy changes at the beginning of an administration.” Riiiight. This is all completely normal. This is fine. Everything’s fine.
Wiley Online Library
The Journal of FinanceVolume 9, Issue 1 p. 41-48
Original Article
TOWARD A MORE MEANINGFUL STATISTICAL CONCEPT OF THE MONEY SUPPLY
Leland J. Pritchard
First published: March 1954
https://doi.org/10.1111/j.1540-6261.1954.tb01204.x
I wasn’t even born when this was published. And I’m older than dirt.
Theory is timeless. Leland Pritchard was the smartest man that ever lived.
We live in a predatory society. The American Bankers Association censored him. He picked every stock market bottom since WWII. He died a multimillionaire and owned a credit union in Grand Lake Colorado.
Yep economic theory from the 1800s and now the 1900s as we pay with fintech and CC.