the satff of the Ridgewood blog
Ridgewood NJ, its my story and I am sticking to it , is Fed Chairman Jerome Powell going to stick with his story of “transitory inflation?”
The interest rate on the 10-year Treasuries have nudged up in recent days (to 1.54%), which is still historically very low, but the direction suggests inflation fears.
Our favorite measures of inflation is the direction of commodity prices. The CRB index is a composite measures of more than 20 commodity prices, including everything from corn to copper to coal. Since Biden’s election these prices have spiked by 58% with a big surge in recent weeks. Some of this rise is a welcome rebound from the deflationary slump in commodity prices last year. As the economy has picked up so has demand for industrial commodities. But commodities are today roughly 20% higher than BEFORE COVID hit and are higher than at any time in at least seven years.
That doesn’t sound so transitory to us.
What the chart is shouting out is that Jerome Powell did no favors to Donald Trump last year. The economy went through a severe deflation which only further depressed economic activity and hit rock bottom on election day. Since then, prices have rapidly accelerated. Is this a mere coincidence?
Well now how’s that working out for you Ridgewood limousine liberals?