There is no surprise to today’s 5.4% reported CPI increase. Price increases of goods and services are here to stay. The Federal Reserve has inflated the money supply significantly since April 2020 without a commensurate increase in productivity. We have another $1 trillion in spending (and money printing), coming associated with the Biden Administration’s infrastructure plan and another $3-4 trillion likely to come as a result of the Biden Administration’s social and climate initiatives (read more here). This is to say nothing of the Fed’s QE efforts. Thus, like COVID, we must learn to live with price increases. This Fed Chairman lacks the backbone required to do what is necessary. Mr. Powell values his career and the equity market more so than the U.S. economy. Stagflation is around the corner.
