Key Points
- Commerce Department indexes that the Fed relies on heavily for inflation signals showed prices continuing to climb at a rate still considerably higher than the 2% annual goal.
- The stubborn inflation data raised several ominous specters, namely that the Fed may have to keep rates elevated for longer or even have to hike at some point.
- Thus far, the economy has managed to avoid broader damage from the inflation problem, though there are some notable cracks.
Google Japan’s inflation and gdp vs debt ration since the 90s. Why are they more afraid of deflation than inflation.
Russia is under sanctions and is waging a costly war. They managed to drop their inflation and grow their economy with higher government spending.
Countries will all face economic issues at times, but inflation due to government spending is not something leaders of rich countries actually worry about.