Residential inflation: The rise in the pipeline

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VOX, CEPR Policy Analysis | Marijn A. Bolhuis, Judd N. L. Cramer, Lawrence H. Summers

Many believe that the current elevated inflation in the US will subside as a range of factors associated with bottlenecks in the goods sector are alleviated. This column argues that the way that residential services inflation is measured and the characteristics of the housing market kept inflation down in 2021 despite large increases in real-time private sector measures. These past increases ensure an uptick in recorded housing inflation in 2022. The authors project that that residential inflation will peak in late 2022, but it will remain elevated in 2023 and that this could make a substantial contribution to overall inflation.  Read the full post here.

The Fed is charting a course to stagflation and recession

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When the long-awaited process of raising interest rates begins Wednesday, market observers will fixate on the precise words used in the Fed statement and during Chair Jerome H. Powell’s news conference. The focus will be on what they signal about the number of rate increases coming this year and next, as well as the schedule for selling down the bonds the Fed accumulated during the pandemic.

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The Fed Must Do Much More to Fight Inflation — And Fast

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During the 1960s and 1970s it took a dozen years for a toxic cocktail of excessive fiscal stimulus, misguided monetary policy focused on symptoms rather than causes, and bad luck on the supply side to generate stagflation—a combination of high inflation and a stagnant economy.  Read the full article on TIME

On inflation, it’s past time for team ‘transitory’ to stand down

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There is a wise apocryphal saying often attributed to John Maynard Keynes: “When the facts change, I change my mind. What do you do?” After years of advocating more expansionary fiscal and monetary policy, I altered my view this past winter, and I believe the Biden administration and the Federal Reserve need to further adjust their thinking on inflation today.

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