On May 4, Jerome Powell dismissed the possibility of the Federal Reserve hiking the federal funds rate by three-quarters of a percent.
On June 15, he announced that America’s central bank was doing just that, a reminder that the Fed continues to give itself more power over the economy, even as it repeatedly demonstrates an inability to predict inflation, economic growth, or even its own policy.
Both consumer and producer prices rose near multidecade highs last month. Price inflation rose to 8.6 percent while wholesale producer prices rose by more than 10 percent.
In both cases, a significant factor behind rising prices—but certainly not the only factor—was high energy prices. This has been reflected in prices related to transportation and shipping. Prices for air travel, for example, have seen some of the biggest price increases in recent months, while gasoline (naturally) has fueled sticker stock for households across the nation.
Many think cancel culture is an odd particularity of the academic world of the Anglosphere. If any place has yet been spared, it is eastern Europe. Eastern Europe has had its fair share of thought policing throughout its vivid history, and people there are usually more willing to take a stance against it. That is one reason why the Austrian Economics Meeting Europe has been held several times in eastern European cities, including Prague, Krakow, Budapest, and recently Vilnius, the capital of Lithuania.
The US Bureau of Labor Statistics released new Producer Price Index (PPI) data today, and it’s not good news for consumers.
The PPI is a measure of prices at the production phase of goods and services, and is often an indicator of where consumer prices are headed. Prior to 1978, the index was known as the Wholesale Price Index.
If you’ve never given much consideration to the power of central banking, it’s time to make that a priority. June 15 marks the start of the Fed’s balance sheet reduction. It’s important to understand what’s in store regarding the upcoming crisis and who’s to blame.
