Powell Says Fed Could Raise Rates More Quickly to Tame Inflation – The New York Times
Writing
How to protect your money during inflation, according to 8 financial planners | Fortune
are wondering how to keep rising prices from negatively affecting their savings and spending habits.
Prices on consumer goods and services including food, energy, and housing have been rising for the past few months. They jumped again in November, rising to 6.8% over the previous year, according to the latest consumer price index data released Friday.
Along with rising prices this year, there have also been supply-chain bottlenecks and rising consumer demand—all of which can cause real challenges as the average American’s purchasing power degrades over time.
While the effects of inflation are not easily avoided, several financial planners tell Fortune that there are steps consumers can take to duck the worst effects.
Inflation blues 🌭
Inflation blues 🌭
Often in the summer time I like to have hot dogs to eat. I usually get the super large package as I like to avoid trash and it saves money. But I swear with inflation the price has doubled since last year. Coffee prices are way up. I put thirty dollars of gas in my truck with hope that it will make it to April without needing gas. My truck is at 99,400 miles but with gas prices I’m starting to think it will be a while before it reaches six digits.
I try to keep my budget in check but with inflation these days it’s just difficult. I might have the big shots job with the corner office and it’s been years since I’ve eaten out besides an ice cream cone on vacation but I tell you each day it gets harder and harder to make ends meet. Markets are down and even safer investments like certificates of deposits and corporate bonds are loosing money with the high rate of inflation. I invest a lot each paycheck both for retirement and eventually owning my own land but every time I look things just get more expensive. At least it’s mild enough that at this point I won’t need much heat.
Statistically, I may be a lot better off than a lot of Americans but I really don’t feel that way with prices going up and goals seeming so far off when you look at land prices even in remote country for what many people would consider to be pretty run-down buildings and land. True, I might eventually be in the place where I can pay cash for it and no rent besides taxes but it still seems impossibly far off.
I don’t want fancy cars or vacations, or a big suburban house – just acerage where I can shoot my guns, have fires and burn whatever I want – have pigs and goats and livestock. Far away from the cities and the liberals so they can’t be telling me what I do with my land, even though I plan to be a damn good stewart of the land even if that means I don’t tickle their you know what.
Live Updates – The New York Times
The Fed’s quarterly economic projections, released alongside the rate decision, showed that officials expected inflation to hover around 4.3 percent at the end of 2022. While that is less than 6.1 percent increase in the 12 months through January, it is well above the Fed’s goal of 2 percent.
Mr. Powell on Wednesday noted that inflation is “well above” the Fed’s target and that supply chain disruptions have been larger and longer lasting than expected. Higher energy prices are further elevating inflation just as price increases broaden beyond areas directly impacted by the pandemic, seeping into rent and other service prices.
“High inflation takes a toll on everyone, but really, especially, on people who use most of their income to buy essentials like food, housing, and transportation,” Mr. Powell said.
The Fed aims for both price stability and maximum employment, and central bank officials have indicated that the labor market is meeting that latter goal, though they hope more workers will return as fears of catching the coronavirus ease and as child-care issues tied to school shutdowns and other virus mitigation measures fade.
NPR
Why inflation is President Biden’s biggest political problem
In a recent CBS/YouGov survey, 58% of Americans said that Biden wasn’t focusing enough on the economy and even more—65%—said this about inflation. Only 33% say that Biden and the Democrats are focusing on issues they care about the most. According to a CNN poll, 7 in 10 Americans think the government isn’t doing enough to reduce inflation and relieve disruptions in the supply-chain. Against this backdrop, it’s not surprising that just 38% approve of the president’s handling of the economy and even fewer—30%— his handling of inflation
Eco-lifestyle Consumerism
Eco-lifestyle consumerism of dubious values seems to be all the rage these days. Many smart marketers have figured out that it’s easy to sell new products to urban consumers who feel guilty about their consumption and ecological impact.
The newest one is buying into “community solar farms” that are these vast areas of farm land covered by solar panels that sell into the grid. The consumer pays a little extra on his or her bill – or maybe about the same with tax credits – and they subsidize the construction of these urbanized farm fields or former forests. They argue it’s carbon-free energy, although it’s heavily backed up fossil generation of the grid. The fossil plants work “less hard” with “less load” so they burn less fuel when assisted by the solar, but it’s still all supported by our fossil-fuel grid while using up valuable farm land and forest land. If we took land that was going to be a solar farms and put it into traditional non-urban uses, what would be the impact on the climate? It would at least be less ugly solar farms to look at.
Geothermal heat that uses refrigerant to pump or dump heat out of the earth using large quantities of electricity is also a popular thing – it’s a new high-end product that can be sold by well drillers – who traditionally could only market their service to rural dwellers beyond the city water supply. I’m equally cynical about this technology, because it uses incredible amounts of electrical energy to power it – theoretically from renewable sources – but rarely that’s case as intense amount of energy to power a geothermal system comes from the fossil-fuel grid.
I don’t discredit the early pioneers in this green technology, but I think it’s valid to ask questions, even if we shouldn’t be necessarily defending the status quo. Certainly, we should be doing everything to get solar panels on existing buildings, as solar is proven technology that is simple and inexpensive. It doesn’t consume land on existing structures, it is long lasting, even if it’s as toxic as the rest of electronics it powers. I think we should increase efficiency standards on new buildings and furnaces, work to do more to improve energy efficiency on existing buildings. Geothermal should be considered as an alternative to air-source heat pumps both in existing and new buildings, but it should not be promoted as a way to “consume more” with “zero impact”.
It’s stupid to ignore the climate crisis we are all facing. But throwing money at so-called green technologies that do little to actually address the problem of over consumption and over population isn’t necessarily a good answer.