Prices are sticky (slow to change), so the effects of last months 50 BPS rise and this week's successive rate hike on inflation is not likely to be realized for a few months, especially with everybody's savings stacked high from stimulus money.
The inflation we are experiencing today is a combination of cost-push and demand-pull. As the summer comes to an end, supply chain bottlenecks should open up; however, if the Fed raises rates too quickly before the supply chain can adjust then we will see an increase in unemployment and thus a drop in GDP (according to Okun's law) and enter a recession.
I love to contemplate these topics and would love to hear insightful/critical opinions on my post.
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