ICYMI: THE NEW YORK TIMES: 179 REASONS WHY YOU PROBABLY DON’T NEED TO PANIC ABOUT INFLATION

POLLING: 58% of Voters — Including 56% of Independents — Believe that Price Increases are Temporary Due to Pandemic Shortages

Moody’s Chief Economist Mark Zandi: The Bipartisan Plan And The Build Back Better Agenda Together Will “Lift The Economy’s Longer-term Growth Potential And Ease Inflation Pressures”

POLLING: 66% of Voters — 60% of Independents and 47% of Republicans — Support Passing the $3.5T Build Back Better Plan Through Reconciliation.

Today, the New York Times published an op-ed by Josh Bivens, Director of the Economic Policy Institute, detailing how current inflation has been “overwhelmingly driven by a narrow group of sectors” that were impacted by the shock of Covid-19. Bivens makes the case that Americans should not fear worsening inflation based on the data, concluding that inflation is well-contained.

KEY POINTS: 

  • So far, the inflationary burst of 2021 has been overwhelmingly driven by a narrow group of sectors that were deeply affected by the shock of Covid-19 and last year’s accompanying shutdowns. In July, some of these sectors (used cars in particular) experienced a big deceleration in inflation, bolstering the argument — led by the Fed chair, Jerome Powell — that the inflationary surge might be “transitory,” or fade quickly on its own.

  • The relative narrowness of current inflation pressures becomes clearer when we consider the broader trend in price changes among a slew of products that aren’t pushing up the overall inflation rate.

  • These findings are a stark contrast to the inflation nightmare on the minds of monetary policy hawks today: the 1970s […] Do today’s price increases resemble the inflation event of the 1970s? Not even close. The San Francisco Federal Reserve Bank monitors the share of sectors seeing price increases over the past three months. So far in 2021, this doesn’t look much different from the previous year, signaling that unusually high inflation seems contained in a subset of sectors.

Read the full article here.

###