Expected inflation is 2.35%? Isn't that too low?

timothylee said:
  • 5 year expected inflation is less than 2.39%
  • 4 year expected inflation is less than 2.42%
  • 3 year expected inflation is less than 2.48%
  • 2 year expected inflation is less than 2.60%
  • 1 year expected inflation is less than 2.90%
Sources:
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Making a forecast is always difficult, especially if it is about something in the future.
 
Low inflation is not good enough. They actually need to reverse the inflation damage that was done by wild money printing. All the things in that matter are still sky high; gas, food, housing. Look at the M1 money supply chart. It is nightmare fuel.
 

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Scataphagos said:
You think so? I just ran a calculation on my TI-BAII... calculates the average inflation rate since the creation of the Fed has been 4.1%... starting with USD in 1913 = $1, and today = $0.02. That's healthy?

If my TI is wrong, somebody please correct.

We've survived the First 100:1 devaluation of the $USD. Will we survive the second? (Bread will be $400. Gasoline, too. Chinese take-out won't be $50 like it is today... it will be $5,000!)
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Not sure if you know how all of this works or not... The average teacher in 1912 made $508 a year. In 2012 they made $56,000. You know the wages go up as well, right? That's more than 100:1.

In the last 40 years through 2021 inflation has averaged 2.78%. In the last 20 years it's averaged 2.15%. This is the modern economy with the tools and products and knowledge to manage growth and inflation provided the folks on the FISCAL policy side cooperate with the people on the MONETARY side of things. I know it's tough to get your head around, but if gas is $500 a gallon in 100 years, teachers will likely be making $6M a year. What do you think a teacher in 1912 would say if you told her in 100 years they make over 100 times as much?
 
ktm said:
Not sure if you know how all of this works or not... The average teacher in 1912 made $508 a year. In 2012 they made $56,000. You know the wages go up as well, right? That's more than 100:1.

In the last 40 years through 2021 inflation has averaged 2.78%. In the last 20 years it's averaged 2.15%. This is the modern economy with the tools and products and knowledge to manage growth and inflation provided the folks on the FISCAL policy side cooperate with the people on the MONETARY side of things. I know it's tough to get your head around, but if gas is $500 a gallon in 100 years, teachers will likely be making $6M a year. What do you think a teacher in 1912 would say if you told her in 100 years they make over 100 times as much?
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I don't know if your inflation numbers are any good... if they came from a government source, they're probably exaggerated on the downside. (I just took a guess and calculated, "If today's $USD = 0.12* vs 1.00 100 years ago"... the inflation rate would have averaged 2.1% for 100 years. But THAT dollar would be worth 6x or more vs today's dollar.

Doesn't mean much when everything costs 100x more. In Turkey, Argentina, Venezuela, others... they make a MILLION TIMES MORE and their money won't buy anything.

All inflation leads to the same Hell. It can be handled for a while, but then it can't. No good reason to have it at all.

*I had calculated .02 present value previously instead of .12.
 
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Hence my having mentioned forward rate swaps. Yes, future expected inflation. Those numbers on the Fed website are nowhere reflected in currently traded levels. I am aware that the composition of their rate consists of other instruments. Though something still does not make sense. I looked specifically at inflation expectations ONE YEAR out.

wmwmw said:
Do you understand what is difference between current inflation and expected future inflation?
You sound more ignorant.
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Whatever you say the low Fed expected inflation in 1 year is not supported by current market rates.

wmwmw said:
You should admit your mistake instead of posting another set of figures to prove you were not wrong.
Current market expectation is high inflation is short lived and later next year fed will begin to cut rate because at that time both economy and inflation will go down dramatically.
That is called yield curve inversion.
https://www.nytimes.com/2022/10/26/business/yield-curve-inversion-recession.html
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Measure inflation by how long you have to work to buy what you need.
In the 60's I had to work about an hour and a half to buy a dozen beer, and about 1/3 of an hour to buy a pack of smokes or a gallon of gas. It's about the same today except gas might be a little cheaper
 
Biden is crushing small business, flooding the country with low pay workers to lower inflation while Biden energy policy is causing inflation.
The Fed is a rubber stamp for the establishment.
Institutions are losing their independence.
 
We have not even seen the full picture of upcoming wage inflation which will push up prices even further. A bank teller in Canada earns 22 dollars an hour, very close to minimum wage. Banks will have to push up salaries by a lot to retain their employees let alone hire new ones. Even immigrants from poor countries don't wanna take those jobs, I see and hear this a lot.

deaddog said:
Measure inflation by how long you have to work to buy what you need.
In the 60's I had to work about an hour and a half to buy a dozen beer, and about 1/3 of an hour to buy a pack of smokes or a gallon of gas. It's about the same today except gas might be a little cheaper
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M.W. said:
We have not even seen the full picture of upcoming wage inflation which will push up prices even further. A bank teller in Canada earns 22 dollars an hour, very close to minimum wage. Banks will have to push up salaries by a lot to retain their employees let alone hire new ones. Even immigrants from poor countries don't wanna take those jobs, I see and hear this a lot.
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I worked in a bank in 1965, my salary was 2300 per year.
 
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