It’s Friday, things have slowed down a little bit, and I appreciate you taking a break from Wordle to check out today’s Commentary. Here’s a riddle: What’s bad when it is down, just right when it’s a little, and bad when it is too much? Answer: inflation. Inflation is really getting out of hand… That’s my three cents. The math is simple: if you’re earning 0 percent on your savings, the boss gave you a 5 percent raise, but inflation is 7 percent, you’re losing ground . Or perhaps the price is the same, but the size of your Egg McMuffin, Domino’s wing order, or toilet paper roll has shrunk: same thing. Sure you can use small amounts of your savings to cover up expenses like higher gasoline prices, but eventually it catches up. The labor markets are tight, demand remains elevated, and the effects of Covid are highly uncertain. Investors demand a higher yield, and the demand for cash increases as companies need to borrow. The nominee for Vice Chair of the Federal Reserve, Lael Brainard, told Congress that the fight against inflation is the central bank’s “most important task” as it shifts gears towards tighter monetary policy. “Inflation is too high, and working people around the country are concerned about how far their paychecks will go… High inflation hurts workers and families, especially the most vulnerable. Our monetary policy is focused on getting inflation back down to 2% while sustaining a recovery that includes everyone.” (Today’s audio version of the commentary is available here . This week’s is sponsored by SimpleNexus , and today’s features and interview with Ben Miller, Co-Founder of Simple Nexus, on what the company has been up to recently between acquisitions and new products.
Source: Mortgage News Daily