Do you believe posted inflation rates?

Following up my earlier statement about sane economists.

Let’s look at what the facts and figures are.

CBO, Feb. 1, 2021

Percentage Change from Fourth Quarter to Fourth Quarter

Personal Consumption Expenditures (PCE) 2024-2031: 2.4%
Core PCE Price Index 2024-2031: 2.1%
Consumer Price Index 2024-2031: 2.4%
Core Consumer Price Index 2024-2031: 2.1%
GDP Price Index 2024-2031: 2.1%

Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents, under their individual assumptions of projected appropriate monetary policy, June 2021

PCE Inflation Post 2023: 2.0%

Short-Term and Long-Term Inflation Forecasts: Survey of Professional Forecasters

One-Year-Ahead and 10-Year-Ahead Inflation Forecasts from the Survey of Professional Forecasters [Excel document] 2021 2nd quarter forecast:
CPI 10-Year: 2.30%

Additional 10-Year-Ahead Inflation Forecasts from Other Sources [Excel document]
Livingston Survey, 2020 4th quarter: 2.23%

You see the analogy between this and the phony COVID cure predictions. I could throw in the climate change deniers as well. These are the forecasts from the real, sane, economists, the nuts and bolts consensus figures from the technicians whose job it is to make the forecasts that the country runs on.

I’m not claiming that these forecasts are always accurate; I’m not claiming that this year’s forecasts not yet available might not be higher. I am saying that contrarians will disproportionately make the news, because the media feels compelled to report both sides as if they are equal, no matter that the scientific community is all standing on one side and the handful of contrarians don’t issue technical reports.

Sam and his ilk predict inflationary ruin every single year. The Society of Professional Forecasters data runs back to 1991, when for the only time they predicted a 10-year rate of 4.0%. They dropped the forecast steadily since, predicting under 3.0% every quarter since the 1997 4th.

You can determine for yourselves which group has been truer to reality.

Once again, my Spidey Sense was early in catching an embiggening problem. This article may (or more probably, no) be of interest.

FYI: paywalled. Is there a money quote or something? Thanks.

Sorry. It is five graphs showing inflationary pressures from energy, food, shelter and used vehicles.

QUOTED from the above article:

“If inflation does become too persistent, if these high levels of inflation become too entrenched in the economy or people’s thinking, that will lead to much tighter monetary policy from us, and that could lead to a recession and that would be bad for workers,” Fed Chair Jerome H. Powell told lawmakers[this week.

Policymakers initially argued that price increases were limited to industries like hotels, airlines and cars. But federal data shows broad-based higher prices, propelled primarily by shelter and used vehicles. Prices for household furnishings and operations, apparel and new vehicles have also gone

The concerns over soaring home prices have economists worried about whether cost increases will last even after the coronavirus pandemic has mostly passed. The still hot housing market has made it that much more difficult for first-time buyers, or those without cash or solid credit, to buy a home. Meanwhile, rising rents in major metropolitan areas are pushing out more people who are now wondering if they can afford to stay.

On top of it all, an energy crisis ricocheted through the supply chains this fall. Higher energy costs are pushing up the prices of just about every other good, economists say. Recent moves by the Biden administration intended to bring costs down at the pump are reflected in the latest inflation data for the first time with a dip in gas prices.”

So they quote Powell, but don’t include as one of the causes of inflation the trillions of dollars the Fed printed and helicopter-dropped on the people? One of the reasons demand is so high is because people are flush with printed money. Three trillion of it in the last two years.

Absolutely. The article is too easy for easing, though that is the reason.

As I see it, there are two logical ramifications of the Fed having been consistently wrong in their assessments of inflation to this point.

  1. It makes it hard to trust anything they might be saying now, and lends credence to the current assessment of people like Summers who disagreed with the Fed and have been right.

  2. A lot of economists believe that the Fed has gotten itself into a pickle here, in that they can’t fight inflation without causing an asset value collapse. If you’re an economist you can debate that in the trenches, but from a lay perspective, the fact that the Fed has obviously been operating under an incorrect assumption about the nature of inflation makes you think these doomsayers are likely correct.