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The mystery at the heart of the 2017 economy

PostPosted: Tue Jun 20, 2017 6:29 am
by Exit40
The mystery at the heart of the 2017 economy
As the Fed considers raising interest rates on Wednesday, low inflation remains a puzzle—and getting it wrong could imperil Trump's economic agenda.
By DANNY VINIK 06/13/2017 11:47 AM EDT

The U.S. economy has been growing for 96 straight months, its third longest expansion on record, and if this were any previous expansion, the Federal Reserve’s decision on Wednesday would be a no-brainer: It would be time to raise interest rates. The unemployment rate, at 4.3 percent, is at its lowest level since 2001 and job growth has remained strong for this stage of the recovery. Most importantly, the Fed currently has its target rate set at just 0.75-1.00 percent, far below historic levels. After eight years of unusually low interest rates, the conditions appear ripe to bring them back up.

But one critical economic indicator is saying otherwise: inflation. Normally when the economy is humming, inflation starts to rise, but in this case, the Fed’s preferred measure of annual inflation has actually declined for three months in a row, hitting 1.7 percent in April. If you exclude volatile food and energy prices, inflation is even lower, at 1.5 percent. (The Fed’s inflation target is 2 percent.) And on Monday, the New York Federal Reserve reported that consumer inflation expectations had declined as well; expectations for inflation three years from now hit their lowest point since January, 2016.

All of which poses a big problem for the Federal Reserve board as it meets to decide whether to raise the Fed funds rate a quarter point. Traditionally, central banks raise rates as the economy approaches full employment, choking off wage growth before it causes a burst of inflation. But in the U.S., most economists agree that the economy is nearing full employment. Yet, there are no signs of rising inflation; in fact, inflation has been falling the past few months.

What’s going on?...

Continues

God Bless

David

Re: The mystery at the heart of the 2017 economy

PostPosted: Tue Jun 20, 2017 9:02 am
by GodsStudent
It's not that hard to figure out why the above delimma exists....WE MAY ALL HAVE JOBS, BUT WE HAVE NO EXPENDABLE CASH, SO WE CAN"T BUY ANYTHING OTHER THAN FOOD AND GAS FOR THE MOST PART.....and ....yeah....volatility in the food and gas markets......rolling my eyes and shaking my head........they think we are SO DUMB !!!!
we are being TAXED to death......seriously.
Anyone (IMO) who thinks healthcare was ANYTHING OTHER THAN A TAX is not thinking that deeply (again, IMO).
It was FORCED ON US, and failure to pay THAT TAX that way causes us to pay a penalty for not participating.

THAT TAX is costing my family of 3 $1900 a month....and yet, when we go to the dr......we are repeatedly being told our meds or our visits aren't going to be covered by the insurance we pay thru the nose for. Now....I would LOVE to cancel my insurance since it's doing me no good.....BUT WAIT.....
OH YEAH....ITS NOT INSURANCE, ITS A TAX.....since they couldn't raise our taxes to pay THE DEFICIT THEY CREATED....and since they want to keep their ELECTED positions.....they created healthcare ......

They have us all working and yet we are working almost as slaves, because all we can afford for our efforts is insurance and the necessities....

they've done a brilliant job...... :wink:

Thank you for letting me share. :wink:

Re: The mystery at the heart of the 2017 economy

PostPosted: Tue Jun 20, 2017 6:06 pm
by 4givenmuch
What Godstudent said! Yup!

Re: The mystery at the heart of the 2017 economy

PostPosted: Thu Jun 22, 2017 11:23 am
by Resurrection Torchlight
4givenmuch wrote:What Godstudent said! Yup!



Agree!

RT