Dee Feat is in Dee Flation - part the forty fifth

As regular readers well know, these missives (and those by the more famous) have been bleating the case that the post-Covid (if we really are "post", of course) inflation was/is a temporary problem; in the sense that it's not been driven by one or more of the usual suspects: wage push, cost push, demand pull. Yes, one might make a bit of a case for the third, in that about $1 trillion went unspent during much of Covid, and Sleepy Joe and the Democrats did put some bucks into households. But it's been largely a supply problem, particularly due to Xi's stupidity.

Well, we just got the latest inflation numbers (manipulated by the Socialist BLS, of course), and it's abating. One month's data does not a trend make. But we know, for sure, that Putin, Xi, and Salman have been the bad actors through all this. So the NYT writes up the story.

After stripping out food and fuel costs, both of which jump around, prices rose by 6.3 percent on an annual basis, down from 6.6 percent in the prior reading. And that core inflation measure pulled back sharply on a monthly basis, posting its slowest increase in more than a year.

That is hopeful. On the one hand, one would expect food and fuel to lead the inflation number, given: gasoline prices were supposed to kill Sleepy Joe and the Democrats. On the other hand, if the regular parts of the market basket are retreating, then that has to mean supply is closer to meeting demand. And that's what the author points out

The report provides early evidence that the Fed's campaign to slow rapid inflation may be helping to ease price pressures, working alongside recent healing in supply chains.
[my emphasis]

This was Jerome Powell's answer when he began his war on the American economy:

Federal Reserve Chair Jerome Powell told lawmakers Wednesday that rate hikes will not bring down oil and food prices, despite their contributing the lion's share of recent inflation gains.

In an exchange with Sen. Elizabeth Warren (D-Mass.), Powell was blunt in saying that the Fed's efforts to tamp down on higher prices with higher interest rates will not impact either category.

"Chair Powell, will gas prices go down as a result of your interest rate increase?" she asked.
"I would not think so, no," he replied.
Then Warren asked, "Will the Fed's interest rate increases bring food prices down for families?"
Powell said, "I wouldn't say so, no."
He nonetheless stressed that the Fed was equipped to tackle inflation more broadly.
"We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses," he said, during his semiannual testimony to Congress.

And to close out this episode, here he is (you've seen it before as a week's quote)

It's not good to have monetary policy be the main game in town, let alone the only game in town.
-- Jerome Powell/2019

At least, so far, he's not been a laughing Laffer.