Thursday, October 6, 2022

More proof that inflation is already moderating and economy slowing. But Fed not yet adjusting to reality.

As data from August and September starts to come in, it's becoming evident that the Fed's rate hikes are succeding in slowing down activity in housing and construction. And it's looking like manufacturing is also starting to slide.

I will note the decline in "prices paid", which indicates to me that inflation is leveling off, if not outright deflating in some areas. And even some things that will improve GDP numbers for Q3 2022 comes with indications that inflation pressures should wane.

But yet central bankers keep insisting that inflation is the main economic concern, and think that rates need to go even higher.

Easy for them to say from their board rooms, but out here in the real world, I think these guys are fighting the last war and at this point they are unneccesarily putting a lot of working people at risk. And how is a rate hike going to do anything about inflation caused by supply chain tightness or market manipulation through oligarchs like OPEC?

We're now at a point that many are likely wishing for a less-than-great jobs report with lower wage growth tomorrow, in the hopes that the Fed will start to back off on its plans to derail the economy and the strong employment market in the name of "price stability". And all of that seems very stupid.

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