LewRockwell Talking about fiddling your way to disaster. They should give Jay Powell the booby-prize and be done with it. That’s because the signs of a resurgent inflationary tide are everywhere, yet this mindless money-printer just can’t keep his hands off the interest rate lever, which has already been fiddled way too low for way too long.
The fact is, our trusty 16% trimmed mean CPI has posted at or above 3.0% for 10 of the last 12 months. And, no, the bars shown below are not rearview mirror snapshots tracking the trailing 12 months. To the contrary, they depict the annualized run rate during the current month—with a different set of the highest 8% and lowest 8% of CPI basket items eliminated each month.
So you can’t get a better, smoother instantaneous reading of the inflation trend. Yet each month for the past year this index has been shouting that inflation is not getting better; and that if you stay on the current 3% path you will increase the price level by 35% every decade.
Stated differently, cutting already low real interest rates in the jaws of the inflation trend shown in the graph below is smoking gun evidence–if any is needed—that in the hands of Keynesian academics and politicized apparatchiks the Fed has become an Infernal Inflation Machine.
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