Inflation

CBO releases U.S. GDP growth, inflation estimates

CBO releases U.S. GDP growth, inflation estimates

The nonpartisan Congressional Budget Office estimates that real gross domestic product, or GDP, will grow 3.1% in 2022, it said in a Wednesday report. “In CBO’s projections, the current economic expansion continues, and economic output grows rapidly over the next year,” the CBO said in its report. The upbeat tone of the report appeared included an implicit prediction that the Federal Reserve will be able to raise interest rates without tipping the U.S. economy into a recession.

I think people may be wrong about stagflation ahead πŸ›‘

While I think the economy may slow in coming months, I am not sure if that will lead to stagflation. Stagflation only exists if inflation doesn’t slow when the economy slows. Much of the current bout of inflation is due to high demand and not enough supply. A recession is likely to lead to significant demand destruction, especially with oil and energy usage but also most other material goods.

In the 1970s, stagflation was a relatively new thing. The federal reserve didn’t really know the way to break inflation is to slam on the brakes on economy really hard, no matter how hard the politicians and the public scream in pain. But Paul Volcker taught the economic world a lesson — it’s possible to break inflation — if you slow the economy enough by high enough interest rates. Jerome Powell is a Republican, and there is no reason to think he will be gentle at raising interest rates to keep President Biden happy from the mobs of angry home-builders, automakers and farmers likely to storm the Washington Maul. 

Personally, I am glad the stock market is down

Personally, I am glad the stock market is down. With inflation being so high these days, you got to save money wherever you can. Getting a little more stock for less money is a good thing. With most things going up in price these, the stock market is a refreshing change of pace. 

NPR

Russia’s war heats up cooking oil prices in global squeeze : NPR

ISTANBUL — For months, Istanbul restaurant Tarihi Balikca tried to absorb the surging cost of the sunflower oil its cooks use to fry fish, squid and mussels.

But in early April, with oil prices nearly four times higher than they were in 2019, the restaurant finally raised its prices. Now, even some longtime customers look at the menu and walk away.

"We resisted. We said, 'Let's wait a bit, maybe the market will improve, maybe (prices) will stabilize. But we saw that there is no improvement," said Mahsun Aktas, a waiter and cook at the restaurant. "The customer cannot afford it."

I know the feeling, I saw that vegetable oil was $5 at Hannaford. Fortunately, I was able to find a bottle at Walmart for still $3, which is expensive but not so bad.

Global food prices soar in March, driven by Russia’s war in Ukraine

Global food prices soar in March, driven by Russia’s war in Ukraine

Aid organizations say they're seeing signs that Russia's invasion of Ukraine is driving up global food prices and pushing millions of people into hunger.

A food price index tracked by the United Nations Food and Agricultural Organization shows that prices spiked 12% between February and March to its highest point since the index started in 1990.

Ukraine and Russia provide an outsized share of the world's supply of key foods including wheat, corn, barley and more.

The impact on people who were already struggling to afford food has been severe, aid groups say. In Afghanistan a month ago, 55% of people were at crisis levels of food insecurity. Now the number has risen to 65%.