hi, great article! One point I am getting hung up on is why wealth inequality, aging population and low productivity would be deflationary. I would think low productivity and less workers would create more inflation as the widgets produced would be lower for the same amount of money in circulation, so cost per widget is higher.
In light of todays Inflation Numbers would you consider writing short break downs? I think theres room for short pieces on interpreting economic releases that may not merit a full article.
OK, I know, I am stupid. But, a few days ago we did our food etc. shopping and prices were considerably higher than a few weeks earlier. How will raising the interest rate make my groceries cheaper ?
I remember the Volker-years and how raising interest to a high level brought us in Europe a long and deep and brutal recession. I bought a small 2-room walk-up apartment, interest rate on the mortgage was 12,5 %. Because of the recession this dwelling lost half its "value" in three years time.
I fail to see how higher prices, unemployment, unaffordable housing, failing businesses, many people on welfare, etc. make for a good economy.
I'd love to get a sense of your process and your 'tech stack'. You're quite prolific, so clearly you have a system that works well for you.
* Data acquisition: do you use a paid data aggregator (Haver/Macrobond, etc...), or do you download data directly (using FRED, website downloads etc..)?
* Do you just use Excel, or do you use R/Python/Tableau for data manipulation + visualization?
At some point it would be cool if you did a post about your process. I'd find it super interesting, and I suspect others would as well.
Could it be a path dependency, that a sudden jump in rates after an extended period of lower rates shocks borrowers and the economy into recession well before the demand effect (such as it may be) starts to work on inflation? I.e., stagflation? That would imply that a longer slower tightening path could protect the economy by allowing restructuring to occur while the inflation cure gradually takes effect? Would that be a better path?
Certainly, the Fed's ham-handed messaging combined with their cluelessness/silence about what it's going to take in total this week isn't boosting anyone's confidence.
Another technical but accessible article.
A suggestion for the decline in productivity, in the UK, is early retirement.
Beautiful article! I love these charts so much I'm curious to know what your tech stack looks like to make them as customizable as I assume they are?
Definitely have to read this twice. Does anyone on the FOMC read your masterpieces? Thanks for your hard work and research.
Great article! Very helpful overview.
Thank you for this article
But... how high will they go?
Perhaps nobody seems to know, but surely we can make a guess as to a ceiling which they are unlikely to reach.
For example, I feel 99% certain that they will NOT go to 20%, as during the Volcker era
hi, great article! One point I am getting hung up on is why wealth inequality, aging population and low productivity would be deflationary. I would think low productivity and less workers would create more inflation as the widgets produced would be lower for the same amount of money in circulation, so cost per widget is higher.
In light of todays Inflation Numbers would you consider writing short break downs? I think theres room for short pieces on interpreting economic releases that may not merit a full article.
OK, I know, I am stupid. But, a few days ago we did our food etc. shopping and prices were considerably higher than a few weeks earlier. How will raising the interest rate make my groceries cheaper ?
I remember the Volker-years and how raising interest to a high level brought us in Europe a long and deep and brutal recession. I bought a small 2-room walk-up apartment, interest rate on the mortgage was 12,5 %. Because of the recession this dwelling lost half its "value" in three years time.
I fail to see how higher prices, unemployment, unaffordable housing, failing businesses, many people on welfare, etc. make for a good economy.
As always, very much enjoy your analysis.
I'd love to get a sense of your process and your 'tech stack'. You're quite prolific, so clearly you have a system that works well for you.
* Data acquisition: do you use a paid data aggregator (Haver/Macrobond, etc...), or do you download data directly (using FRED, website downloads etc..)?
* Do you just use Excel, or do you use R/Python/Tableau for data manipulation + visualization?
At some point it would be cool if you did a post about your process. I'd find it super interesting, and I suspect others would as well.
Could it be a path dependency, that a sudden jump in rates after an extended period of lower rates shocks borrowers and the economy into recession well before the demand effect (such as it may be) starts to work on inflation? I.e., stagflation? That would imply that a longer slower tightening path could protect the economy by allowing restructuring to occur while the inflation cure gradually takes effect? Would that be a better path?
Certainly, the Fed's ham-handed messaging combined with their cluelessness/silence about what it's going to take in total this week isn't boosting anyone's confidence.