• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

EXCLUSIVE: ‘The Man She Is Today’: European Companies Accused Of ‘Importing’ Woke Ideology

May 29, 2025

‘The Economy Is On Fire!’: Kevin O’Leary Drops Fact Check On CNN Panelists Railing Against Trump’s Economy

May 29, 2025

DeSantis Signs Bill Making Gold And Silver Legal Tender

May 28, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Saturday, May 31
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    EXCLUSIVE: ‘The Man She Is Today’: European Companies Accused Of ‘Importing’ Woke Ideology

    May 29, 2025

    ‘The Economy Is On Fire!’: Kevin O’Leary Drops Fact Check On CNN Panelists Railing Against Trump’s Economy

    May 29, 2025

    DeSantis Signs Bill Making Gold And Silver Legal Tender

    May 28, 2025

    John Deere Announces $20 Billion Plan To Build Up American Manufacturing

    May 28, 2025

    EV Startup Promised To Cut China Ties — Then Reportedly Shared US Data Anyway

    May 27, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Business»Inflation Missed Expectations In January. Are We Just Stuck With High Inflation Forever?
Business

Inflation Missed Expectations In January. Are We Just Stuck With High Inflation Forever?

February 15, 2024No Comments6 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Fed Reserve Board Chair Powell Announces Interest Rate Decision
Share
Facebook Twitter LinkedIn Pinterest Email
  • The Bureau of Labor Statistics announced on Tuesday that inflation increased at a 3.1% annualized rate in January, despite widespread expectations of 2.9%.
  • Inflation has remained stubbornly above 3% since its peak under President Joe Biden, prompting economists to question whether inflation will ever be able to reach the Federal Reserve’s target under current policies.
  • “Presently, it looks like disinflation is continuing, but with a lot of fits and starts and the occasional reversal of direction,” Peter Earle, economist at the American Institute for Economic Research, told the Daily Caller News Foundation. “Getting the annual rate of inflation down to the 2% area, which is the Fed’s current target, is going to be a slow, bumpy, and uncertain process.”

Year-over-year inflation failed to meet economists’ expectations in January after not dropping below 3%, leading experts to speculate if achieving the Federal Reserve’s inflation goal is achievable under current conditions.

The consumer price index (CPI) was reported to be 3.1% year-over-year for January on Tuesday, declining from 3.4% in December, but well above expectations of 2.9% and the Fed’s goal rate of 2%. Opinions are mixed on whether inflation is truly trending toward the Fed’s target, with some economists seeing the rate as highly fluctuating and unpredictable while others point to factors keeping it closer to 3%, according to experts who spoke to the Daily Caller News Foundation. (RELATED: US Stocks Tumble After Inflation Comes In Above Expectations)

“The Fed bases some of its estimates off the concept of a natural rate of interest,” Peter Earle, economist at the American Institute for Economic Research, told the DCNF. “The natural rate of interest is a theoretical concept that indicates the interest rate at which the supply of savings equals the demand for investment in a fully functioning, stable economy with stable inflation and full employment. It’s an equilibrium concept. But, of course, that rate is not directly viewable, so its value is estimated. Not only that, but whatever that rate is, it’s not static — it’s changing at every moment. Equilibrium is a concept in economic models, rarely if ever seen in the real world.”

See also  Maryland School District Sues Social Media Companies, Alleges Their Platforms Are Contributing To Mental Health Crisis

The natural rate aims to gauge at what level the Fed should put the federal funds rate to counteract inflationary pressures by tightening credit conditions and, in turn, dampening the economy. The federal funds rate is currently in a range of 5.25% and 5.50%, the highest rate in 23 years, in an effort to bring down inflation that peaked at 9.1% in June 2022.

“There likely is a natural rate, but figuring out what that natural rate is … that’s not so easy,” Norbert Michel, vice president and director of the Cato Institute’s Center for Monetary and Financial Alternatives, told the DCNF. “The rate of inflation has generally been on a downward trend, so we can say it is ‘trending toward 2%,’ though how fast it might get there is not so easy to predict.”

CPI was commonly below or around 2% from 2012 up to 2021, after which inflation began rapidly rising starting in March and April of 2021, according to the Federal Reserve Bank of St. Louis (FRED). Inflation decelerated quickly from its peak in June 2022, reaching around 3.1% year-over-year in June 2023 and remaining stubbornly above 3% since.

Ladies, this Valentine’s Day, find yourself a man who sticks around as long as “transitory” inflation does: pic.twitter.com/cdGQIeg4DQ

— E.J. Antoni, Ph.D. (@RealEJAntoni) February 14, 2024

“Presently, it looks like disinflation is continuing, but with a lot of fits and starts and the occasional reversal of direction,” Earle told the DCNF. “If you look at the 1980s, you see inflation fall from incredible highs to a low between 2% and 3%, and then back above 4% with only an occasional dip below 3% for the rest of the decade, despite the Fed hikes in the mid- and then late-1980s. Getting the annual rate of inflation down to the 2% area, which is the Fed’s current target, is going to be a slow, bumpy, and uncertain process.”

See also  Bidenomics In One Lesson: Latest Job Gains Fueled By Foreign-Born Workers, Gov’t Employees

The U.S. experienced a more extreme bout of inflation starting in the 1970s, peaking at over 14% year-over-year in March 1980, according to FRED. The federal funds rate was then set to over 17% in April 1980 and then to over 19% in June 1981, leading to a rapid decline in inflation and ultimately triggering a recession.

Some economists see the current rate of federal spending and government policies related to the money supply as continuing to fuel inflation, increasing the neutral rate, and making dampening inflation unlikely without more rate hikes. The U.S. national debt hit $34 trillion for the first time just before the end of 2023, after adding more than $800 billion in new debt in just the fourth quarter.

“Those telling us that inflation has been trending toward 2% clearly didn’t look at any of the available data, which shows we’ve been steadily trending toward 3%,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “We’ve arrived there, and there’s no indication we’ll be going significantly lower anytime soon. We have a Treasury borrowing almost $2 trillion a year and rising while the Federal Reserve is allowing the money supply, bank reserves, and credit to all expand.”

Following the disappointing CPI report, more investors are betting on a “no landing” scenario where inflation would remain elevated but strong economic growth would continue, threatening factors like real wages that struggle to keep up with inflation. Investors and the Fed have remained hopeful for a soft-landing scenario, where inflation is brought down to the target range without triggering a recession.

See also  Rivian Electric Truck Owner's 'Honeymoon Phase' Ends When It Gets Stuck in Snow

“I like to remind folks that for several years prior to the Great Recession, and many years after the Great Recession, the US was under the 2% target,” Michel told the DCNF. “We should probably be asking ourselves whether the Fed can precisely hit a target.”

The Fed did not immediately respond to a request to comment from the DCNF.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

expectations high inflation January Missed Stuck
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

EXCLUSIVE: ‘The Man She Is Today’: European Companies Accused Of ‘Importing’ Woke Ideology

May 29, 2025

‘The Economy Is On Fire!’: Kevin O’Leary Drops Fact Check On CNN Panelists Railing Against Trump’s Economy

May 29, 2025

DeSantis Signs Bill Making Gold And Silver Legal Tender

May 28, 2025

John Deere Announces $20 Billion Plan To Build Up American Manufacturing

May 28, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

US Congress’ Go-Ahead To Stopgap Funding Bill Averts Government Shutdown

October 1, 2023

Elon Musk seeks to end $258 billion Dogecoin lawsuit

April 1, 2023

Cartel Gunmen Spread Terror in Mexican Border State After Dumping 12 Bodies

September 30, 2023

Ian Happ Hits Willson Contreras In Head With Backswing. Miles Mikolas Then Gets Ejected For Revenge

July 29, 2023
Don't Miss

EXCLUSIVE: ‘The Man She Is Today’: European Companies Accused Of ‘Importing’ Woke Ideology

Business May 29, 2025

Consumers’ Research issued a “Woke Alert” on Thursday warning American shoppers that three European companies…

‘The Economy Is On Fire!’: Kevin O’Leary Drops Fact Check On CNN Panelists Railing Against Trump’s Economy

May 29, 2025

DeSantis Signs Bill Making Gold And Silver Legal Tender

May 28, 2025

John Deere Announces $20 Billion Plan To Build Up American Manufacturing

May 28, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,136)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,645)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Sigourney Weaver Stars In ‘The Lost Flowers of Alice Hart’ First Trailer

July 6, 2023

Paris Hilton Reveals She Had An Abortion, Says Roe V. Wade Repeal Was ‘Mind-Boggling’

February 25, 2023

Up To 80% of Jobs Could Be Disrupted by AI

April 1, 2023
Popular Posts

EXCLUSIVE: ‘The Man She Is Today’: European Companies Accused Of ‘Importing’ Woke Ideology

May 29, 2025

‘The Economy Is On Fire!’: Kevin O’Leary Drops Fact Check On CNN Panelists Railing Against Trump’s Economy

May 29, 2025

DeSantis Signs Bill Making Gold And Silver Legal Tender

May 28, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.