It'll be interesting to see whether the Q2 earnings calls coming continue to outpace the June CPI report, that would again suggest a need to increase wages to sustain consumer buying power and evaluate rate hikes to prevent increased retained earnings from resulting in irrational investor behavior.
Yeah the problem is all that spending is being closed to retained earnings. In fact, it's one of the primary reasons corporate profits are continuing to outpace inflation, productivity, and wages. Same s____ happened after WWII, you can't spend blindly without external controls/procedures. Unionized workers will be (in theory) okay because that stuff is normally baked in to COLA adjustments, open-shop are boned though.
At any rate, the colloquial definition of inflation refers to costs growing faster than buying power for the average consumer. In some cases this refers to unscrupulous banks expanding the money supply without any material gains not closing to wages. Another cause is supply chain shocks inducing bottlenecks in aggregate supply and thus an increase in prices vis a vis unyielding demand. Inflation can even occur when otherwise strong consumer spending closes to retained earnings with no growth in wages/salaries expenses, both diminishing consumer buying power and exacerbating wealth concentration.
Which do you see as the primary cause of inflation today? That's more a Rorschach of your worldview than anything else.
Tl;dr: Yes, we need to shrink the fed’s balance sheet. Yes, rent-seeking behavior continuing to outpace production. However, tightening the belt on aggregate demand via raising interest rates will rival its austere predecessor in forcing the most vulnerable to shoulder the burden. I contend the solution is more post-WWII than Gas Crunch; we need to ensure buying power parity.
And. They. Don't. Listen. Stupid!
