The anti-inflation pivot of 2022 • Hacker News Board

Re: The anti-inflation pivot of 2022

#21

Post by refurb » Mon, Sep 19, 2022, 2:13 PM UTC

rel2thr wrote: post #11

Month to month inflation has been flat or near flat for some months now. It’s seems like we had a price spike in December/Jan for various reasons and now things have stabilized. If trend continues it seems we should be back in normal yoy inflation rates shortly once we start comparing against that post spike floor

Chart 1 lays it out.

https://www.bls.gov/news.release/pdf/cpi.pdf

Inflation isn't increasing much in August - relatively to July, but July was still high.

That graph needs to go negative (a decrease in the inflation rate each month) for a long time before we get back to something "normal" like 2-3% inflation.

Re: The anti-inflation pivot of 2022

#22

Post by juve1996 » Mon, Sep 19, 2022, 2:15 PM UTC

jmyeet wrote: post #8

Here's the lesson I want people to learn: we had 40+ years of stagnant real wages (overall; there are exceptions). What happened in the pandemic was: 1. People realized going into an officce to work was unncessary and even anachronistic for many jobs; 2. Employers like employees in the office as a form of control; 3. Employers made short-term decisions to lay off huge amounts of people (even after taking PPP loans fo…

Corporate taxation is a great tool for managing inflation but our legislature is gridlocked and taxes are not popular. It's a shame because they would be particularly effective right now w/ rate raises.

Re: The anti-inflation pivot of 2022

#23

Post by ch4s3 » Mon, Sep 19, 2022, 2:15 PM UTC

seydor wrote: post #19

> It is the most concerted effort to slow down growth and employment in the interests of monetary stability that we have seen since the 1980s. I see it as a war of generations. The boomers/genXers are eager to preserve their wealth and are once again dumping on young people. The 70s was a period of high inflation, it was also, according to piketty a period of high income equality for the world over. The central banks…

You know high inflation makes it worse to be poor right? Especially core inflation.

Re: The anti-inflation pivot of 2022

#24

Post by bilsbie » Mon, Sep 19, 2022, 2:16 PM UTC

rel2thr wrote: post #11

Month to month inflation has been flat or near flat for some months now. It’s seems like we had a price spike in December/Jan for various reasons and now things have stabilized. If trend continues it seems we should be back in normal yoy inflation rates shortly once we start comparing against that post spike floor

Meesa be thinking yousa confusing the second derivative with the first derivative.

Re: The anti-inflation pivot of 2022

#25

Post by consp » Mon, Sep 19, 2022, 2:16 PM UTC

rel2thr wrote: post #11

Month to month inflation has been flat or near flat for some months now. It’s seems like we had a price spike in December/Jan for various reasons and now things have stabilized. If trend continues it seems we should be back in normal yoy inflation rates shortly once we start comparing against that post spike floor

Around here there was a minor stationary period in may and june but was up before has gone up again since that, ymmv according to where you live.

Re: The anti-inflation pivot of 2022

#26

Post by refurb » Mon, Sep 19, 2022, 2:17 PM UTC

blagie wrote: post #15

sfe22 wrote: post #9

Earlier quoted context omitted.

Why 8? Doesn’t there need to be a premium for borrowing money? If i can borrow money at zero percent inflation adjusted rate, that is a great deal and still inflationary. I would say 12 percent would be neutral on 10 percent inflation.

No, there doesn't need to be a premium on borrowing money. Why would there need to be a premium? If I can invest in businesses with 0% return and make a profit, that's generally good for short-term economic growth, and bad for long-term economic efficiency. I'm not arguing for more or less interest, but I don't think there is a "natural." Interest rates have gone negative several times in several contexts, and the un…

Of course there needs to be a premium to lend money.

Why would I lend someone money to get the same amount back (in real terms)? You'd need at least some premium to account for risk of non-payment, changes in inflation, etc.

There doesn't need to be a consistent premium to borrowing money. So if I borrow $1M for 30 years right now the interest rate doesn't have to be 10% because most people assume inflation will come down, so the average inflation over 3 years might be 3-4%, so an interest rate of 5-6% is probably enough of a premium.

Re: The anti-inflation pivot of 2022

#27

Post by foobarian » Mon, Sep 19, 2022, 2:18 PM UTC

rel2thr wrote: post #11

Month to month inflation has been flat or near flat for some months now. It’s seems like we had a price spike in December/Jan for various reasons and now things have stabilized. If trend continues it seems we should be back in normal yoy inflation rates shortly once we start comparing against that post spike floor

Don't forget that the Covid stuff finally seems to have settled to some kind of new "normal," and that it's a once-in-a-century event that is going to be very hard to make any comparisons to.

Re: The anti-inflation pivot of 2022

#28

Post by colinmhayes » Mon, Sep 19, 2022, 2:18 PM UTC

refurb wrote: post #21

rel2thr wrote: post #11

Month to month inflation has been flat or near flat for some months now. It’s seems like we had a price spike in December/Jan for various reasons and now things have stabilized. If trend continues it seems we should be back in normal yoy inflation rates shortly once we start comparing against that post spike floor

Chart 1 lays it out. https://www.bls.gov/news.release/pdf/cpi.pdf Inflation isn't increasing much in August - relatively to July, but July was still high. That graph needs to go negative (a decrease in the inflation rate each month) for a long time before we get back to something "normal" like 2-3% inflation.

I think you're misreading the chart. My understanding is that 12 months of 0 means a year over year inflation rate of 0, not the same amount of inflation as the year before.

Re: The anti-inflation pivot of 2022

#29

Post by dragontamer » Mon, Sep 19, 2022, 2:20 PM UTC

colinmhayes wrote: post #16

rel2thr wrote: post #11

Month to month inflation has been flat or near flat for some months now. It’s seems like we had a price spike in December/Jan for various reasons and now things have stabilized. If trend continues it seems we should be back in normal yoy inflation rates shortly once we start comparing against that post spike floor

Core was .6% last month, pretty horrendous after July looked good.

Nothing against you in particular, but all the "inflation complainers" were using CPI (not core-CPI) back in January/February to talk about Fed inaction. Now that we're 9 months later, with the Fed hiking rates, suddenly those _SAME PEOPLE_ are now complaining that the Fed rates are hiking too much.

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That being said, I agree with you. Core-CPI exists for a reason, and its a better measure of long-term trends. Oil/food prices change dramatically, while they're important real world measures of cost of living, they change too quickly to be useful. We should typically ignore oil/food prices and focus on other costs of living to try to glean the longer-term trend.

But what's even worse than using "CPI" or "core-CPI", is when people switch between the two to make a focused political argument, rather than an analysis into the state of the economy. Stay consistent damn it.

Re: The anti-inflation pivot of 2022

#30

Post by spywaregorilla » Mon, Sep 19, 2022, 2:21 PM UTC

I think the US (and Canada) just needs to ride the tide and let all the other boats sink. Pretty much everyone else is screwed. I think people are underestimating the second order effects of the US still having stable energy and farming capabilities. We'll see more stuff get done here and less stuff done elsewhere. Unemployment will be great here no matter what we do really. It will suffer in other countries.

Though I'll admit, I still found the stat that of 20% youth unemployment in China to be shockingly high. The idea that they're lowering their interest rates is also bonkers to think about. Their economy has been slow motion train wrecking for soooo long now. God help them if they get another covid flare up over the winter and and are stupid enough to do another lockdown.