Biden-Fueled Inflation Concerns Growing


From the story: Federal Reserve Chairman Jerome Powell remains widely respected by the retail community, but when he talks about 2% inflation, there are many who believe the number is unrealistic. There are seven ways to demonstrate that 2% doesn’t compute. Some say that it’s a sugar high from the recent $1,400 dollar cash distribution, or the freedom granted by vaccination. Some say it could be the on-going unemployment checks – but no matter how you look at it, there are some seriously long lines are forming outside luxury retailers and prices for fashion items are skyrocketing. Have we pumped too much money into the economy? (Forbes). David Lynch looks at the role played by “uneven economic reopening” (Washington Post). From Hugh Hewitt: Pretty much everyone not in the Biden Administration admits that the #BidenInflation is upon us. But. The president still wants to throw another $4 trillion on the fire (Twitter). From another story: …the spectre of long-dormant inflation has fixed-income fund managers on edge and taking precautions to safeguard their portfolios. “Even if it is not our base-case scenario, I do think being mindful of the potential for inflation to exceed expectations is wise,” says Brett Wander, chief investment officer of fixed income at Charles Schwab. “You don’t buy car insurance because you expect to get into a car accident. You buy it in case you do” (Financial Times). Meanwhile, Biden says people will return to work “if they’re paid a decent wage” (Washington Times). But he also insisted “We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits” (National Review). From the Wall Street Journal: Employers nationwide have complained for months that Washington’s $300-a-week bonus has made it harder to find willing workers. Yet Mr. Biden brushed aside the complaints, saying he and his staff “don’t see much evidence” that the payments are a “major factor.” The perverse incentive of the bonus is clear, and the evidence goes beyond the anecdotes from tens of thousands of employers. The 266,000 net new jobs in April far undershot economists’ forecasts, and the Labor Department’s latest Jolts survey showed some 7.4 million unfilled positions. Bank of America economist Joseph Song notes that any worker earning less than $32,000 annually would get a raise by going on unemployment, according to a Fox Business report (WSJ).