Inflation’s painful impact is likely to affect many Americans for years to come, new findings show. In a survey published by Bankrate, 49% of respondents said they are saving less than they were a year ago, using their nest eggs to cover the increased cost of everyday items. The survey came just a few days after the Labor Department reported that the consumer price index rose 5% on an annual basis. “Inflation in the US is not on track to settle anywhere close to the Federal Reserve’s 2% target, in our view,” BlackRock strategists said, while warning investors who are flocking back to the stock market. “Recession is foretold as central banks try to bring inflation back down to policy targets … Rate cuts are not on the way to help support risk assets,” the strategists added. As the Fed is already worsening the country’s fiscal situation through higher interest rates, Thomas L. Hogan, Senior Fellow at AIER, says the deferred payments of its $41 billion debt to the Treasury will be borne by American taxpayers.
Fox Business/Megan Henney
Pain of high inflation likely to linger for many Americans
Inflation is finally beginning to loosen its stranglehold on the U.S. economy, but the financial pain from high prices for many households is set to linger for years to come, according to a new survey.
Findings published by Bankrate on Monday show that more than two-thirds of Americans are saving less than they were a year ago – and are quickly draining their rainy-day funds to pay for more expensive everyday items. By comparison, just 15% of respondents said they are saving more, while 16% said their finances have not changed because of inflation.
“Those financial sacrifices Americans have made could mean the pain from inflation lingers – even when price increases eventually reach a more desirable level,” the survey said.
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Business Insider/Jennifer Sor
Inflation won’t come close to the Fed’s target, and investors buying the dip in stocks should not hope for policymakers to save them, BlackRock says
Inflation won’t come down to the Fed’s 2% target, and investors who are buying the dip in stocks shouldn’t be hoping that central bankers will cut rates and spur a rally, according to BlackRock.
“Inflation in the US is not on track to settle anywhere close to the Federal Reserve’s 2% target, in our view. That was reinforced by March inflation data,” strategists said in a note on Monday, referring to last month’s Consumer Price Index report, which showed prices climbed 5% in March on an annualized basis, down from February’s reading of 6%.
Though that increase was lower than economists’ estimates, prices are still well above the Fed’s long-run inflation target. Meanwhile, core CPI, which excludes volatile food and energy prices, increased 5.6% year-over-year in March, suggesting inflationary pressures are still present in the economy.
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AIER via Quoth the Raven/Thomas L. Hogan
The Fed Is Bankrupt
Federal Reserve Chair Jerome Powell recently testified before Congress on the current state of the US economy. In addition to monetary policy, Powell was questioned about the Fed’s regulatory proposals regarding cryptocurrencies and climate-related financial risks.
Barely mentioned, however, was the Fed’s balance sheet. The Fed has experienced significant operating losses over the last six months, which have exhausted its existing capital. Those losses represent foregone revenue to the US Treasury.
In the post-pandemic period, the Fed expanded the money supply significantly to support a swift economic recovery. It did so by purchasing vast amounts of US Treasury bonds and mortgage-backed securities. While those assets seemed like good investments at first, they are now a major hole in the Fed’s financial position.
You can read the full article, here.