What Inflation?: An inflation rate of over 9% annualized was reported for the month of June, leading many to expect there’s much more to come in terms of higher prices and the eventual interest rate increases required to bring inflation to heel.
But maybe not. ITR Economics Brian Beaulieu offers a 5-minute podcast/article in which he makes the case that “the signs of lessening inflation are all around us” and that if policy makers and the Federal Reserve fail to perceive it, they may increase rates too much and//or too soon, accelerating the recession they want to avoid…In particular, he makes the point that many executives misjudge when the effect of interest rate increases will actually occur. Check out Mr. Beaulieu’s useful insights on “Interest Rates and Inflation.”
A Refocused Fed: With the resurgence of inflation for the first time in 40 years, many fear an increase in interest rates will tip the economy into recession. It’s been so long since we had to worry about inflation that even those who follow matters economic may have forgotten that past successes in coping with inflation relied on more than just interest rate increases. For a good primer on what worked before, and might again, check out Dr. Brian Wesbury’s summary of the matter “Refocusing the Fed.”
