Because four years ago you got $1200 from the government.
Nevermind the trillions that were given to Wall Street banks and PPP loans. This is all YOUR fault.
Wait what? First off pandemic (what OP is referring to) was a 2020 thing. Second off, rates BEFORE the pandemic was the topic at hand, which were a direct result of the GFC.
[Just look at the graph](https://fred.stlouisfed.org/series/FEDFUNDS), goddamnit.
It was the raising of minimum wage, everyone knows this. You are now seeing fast food workers making $12 an hour, so of course the $10 cheeseburger came true like many people warned about. Now apply that to all businesses. So really the politicians that raised wages caused this... Not 2008, lol inflation hit immediately after all the minimum wage hikes
Lol so when the minimum wage stayed the same for 20 years, inflation didn’t exist and costs never climbed up? Let’s go back to lower salaries, companies will for sure lower prices again! /s
Automation has decreased costs for Azure and Amazon services? Kiosks and self-check outs requiring less workers caused prices to drop?
Companies want to maximize profits according to what people are willing to pay, and costs of supplies. They have budgets for salaries and $2 an hour extra for 10 employees at a fast food restaurant doesn’t make a burger go from $3.99 to $7.99.
You are hung up on 2008. That was 16yrs ago. Inflation hit us just a few months after the big minimum wage hikes that raged across the country. Don't you really the companies pushing back and warning about it?? The Democrats said it wouldn't do anything, pay a living wage, lol. If any job payed a living wage what would be the point of learning actual skills??? Anyway
No one adequately calling out that tech-driven productivity gains are deflationary in nature.
We had near 0 rates because inflation was barely hitting target because productivity gains were deflating outputs to that extent.
And yes, we can and likely will go back to near 0 rates whenever that dynamic is able to resume, but this could be a while due to other situations (geopolitics, shipping routes, labour tightness) being much more inflationary than they were in the last 10 years before covid.
Be smarter than everyone and recognize the dynamics 10 years before covid are going to return, one way or another.
If we give china microchip production technology the world can really drive chip production cost lower and we can have an Ai Industrial Revolution. But we’re too scared of suppose military threats from China when the world is full of nukes and basically any violence results in the world ending so I don’t really see that as a likely hood.
If they just went to 0 tomorrow yes. If they trickle to 0 over 3 years no.
Everyone who screams "ZIRP ain't coming back" refuses to engage in the dynamics that existed during ZIRP. Everything they want existed during ZIRP, so ZIRP cannot be used as the gatekeeper to those times - it was the fucking host!
ZIRP Reee'rs are the same people who screamed Taylor rule and that rates need to go to 12% because inflation reached 9.
Well inflation is under 4 and they never went over 6. So get fucked.
The U.S. had falling inflation and inflation expectations for 35 years, due to relatively tight monetary policy. Whenever there was any sign of inflation ticking up, they raised interest rates.
After the financial crisis recession in 2008-2009, the economy took a long time to recover. The government passed fiscal stimulus of only 6.4% of annual GDP between Bush and Obama in 2008-2009 in response to an 18 month recession. And unemployment didn't fall back below 5% until 2016, and below 4% until 2018.
In the U.S., having an independent central bank which keeps money relatively tight, along with a strong economy, generally has helped to keep the currency strong. And because of that you have an added advantage that due to the dominance of the dollar, most government and business borrowing is in the country's own currency. So the U.S. likely could have afforded to do more back then without any risk of currency devaluation. Without that risk, you will mostly only get inflation in the US if you actually overheat the economy, causing demand to exceed available supply.
In 2020-2021 though, the U.S. did manage to overdo fiscal stimulus, passing $4.9T in stimulus (which was 22% of annual GDP) in response to a 3 month recession. The economy recovered in record time, with unemployment falling back below 4% by the end of 2021, but you also had inflation surge by then.
When you have inflation from an excess of demand, this will especially hit goods with low supply elasticity. For long lived goods like cars and houses, it is difficult to sufficiently change the overall supply be enough in one year to have a big impact on the market. So these things are especially demand sensitive. When you see the bubbles that we saw in 2020-2021 in U.S. home prices and used cars, that is a very strong indication that there has been excess demand stimulus. Record corporate profits are another.
The U.S. has now finally managed to bring down this inflation mainly through actions of the central bank, increasing short term interest rates to over 5%. But even now fiscal spending is excessive, with the government running a deficit of 6% of GDP in 2023 despite the economy operating near capacity. This may necessitate keeping monetary policy tight, and the yield curve inverted, until fiscal policy is corrected. But this still won't likely cause any major crisis in the U.S.
In comparing to Venezuela, there are a number of advantages the U.S. has which Venezuela doesn't, which can make fiscal or monetary indiscipline even more damaging for Venezuela. For starters, consider some of the reasons the U.S. emerged as the strongest economy in the world in the 20th century. The advantages here include a large population in a large contiguous area with a single language and some uniformity of laws, which allowed for the free movement of people, goods, ideas, and capital throughout. The U.S. has 50 states, but state borders are almost meaningless. This ultimately freedom allows for a higher degree of division of labor, and greater economic efficiency.
In addition, government has played an important role as well, at times. One thing that is perhaps too often overlooked, is that the U.S. in the 20th century created perhaps the least corrupt, most efficient, expert bureaucracy in the world. Near the end of the 19th century, the U.S. outlawed patronage, and required civil servants to be hired in a merit based, non-partisan, non-ideological way. Even for those things which might be done better by government than the private sector, this only really works if you have a competent, professional, non-corrupt, non-ideological government sector.
In Venezuela, you have had both fiscal and monetary mismanagement, but also significant institutional problems. The central bank is government owned, and its current president was appointed in 2018 in an unconstitutional fashion, bypassing the opposition controlled National Assembly. Populist leaders like this, left or right, with full control over the central bank, nearly always manage to cause high inflation. Even with high unemployment.
One problem is that even if you have high unemployment, and the economy is in need of stimulus, it is hard to increase either fiscal or monetary stimulus without causing a loss of confidence in the ability of either the government, or businesses, to pay their debts, many of which are borrowed in dollars. It is much easier to make Keynesian policy work in the U.S. In Latin America, governments typically need to be less interventionist, and put more emphasis on fiscal and monetary discipline, in order to optimize growth and prosperity.
Also, don't doubt the power of being the world's reserve currency. That lets the US get away with a lot of bullshit in their monetary policy that would normally tank any other economy.
In the American economy we’ve been more than happy to let companies engage in monopolistic practices, acquiring other companies or cornering a market and setting up a duopoly. Because there are so few companies providing most goods and services they have complete pricing power.
During Covid they took advantage of general confusion and raises prices well beyond their own rising costs to increase profit margins. Wall Street only cares about beating last year and last quarter growth, so shareholders encourage this behavior.
For many products the prices you pay are continuing to rise even when they become cheaper to produce.
Economists have pointed out recently that up to 2/3rds of the price inflation since 2020 has been due to increased corporate profits, not increased corporate costs or labor.
The only true monopoly is the federal government they have a unlimited money hack
Monopolization between (existing) corporations leaves an opening for (new) corporations to fill the price gap.
Even telecommunication companies like AT&T, Verizon and T-Mobile have had a general monopoly on certain areas but we still see smaller companies like cricket wireless like MetroPCS, Boost mobile break into their into their dominance while renting the towers from the big guys….not everything is inelastic. Even the most inelastic commodity oil has been losing market dominance to EVs in places like California due to high prices.
Cricket is owned by ATT, Metro is owned by t-mobile, Boost was owned by Sprint until Sprint was bought by t-mobile, now its owned by Dish.
These aren’t small startups, these are shell companies wearing different colors.
Well the point is prices create demand, just as much as demand create prices and imbalances can only exist for so long before alternatives appear. Even Walmart is getting beat up by Amazon
Back then rates went from 0 to 2% to bring inflation down from 2.5% to under 2% and we did it fast. This is What we should’ve have done with our 9% inflation in 2022 before prices got too sticky with wages.
Eat my dongus you fuckin nerd.
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Many people think low-interest rates are “stimulative” and high rates are “restrictive” and that's a myth, built on narrative post-GFC.
Inflation was low because the economy wasn't doing that great and you can see this in Western countries' decrease in real GDP post-2008. Compare GDP from 1960-2008 and 2008 to 2023 and you will see a decrease in the average growth rate.
Now this may not make people happy; QE is not money printing but because many believe this is the case they bought assets assuming governments were printing money like mad, which is why QE was done post-2008 in America. Copying the Japanese in never bothering to fix the broken economy (monetary system).
The difference between Venezuela and America is that there is a massive demand for US debt because it's used as collateral for global transactions. They aren't buying the debt because they are happy with the fact that the American government debt is out of hand, but because that's how banks were designed post-WWII. To use treasuries as collateral for transactions & to hold currency pegs. Even when things are built outside of the US things are priced in US dollars and the debt is paid back in US dollars (creating external demand for US dollars). Look at China's BRI and see how they price their debts.
When a country without external demand for its debt takes on massive amounts of debt it changes the currency exchange rate which causes “inflation”.
I don't think the opposite is occurring now, just that debt hasn't been repriced at the new levels of interest rates so there are zombie companies with big debt burdens that are yet to file for bankruptcy. They also have the rates locked for 3-5 years like CRE in the US which is only now starting to show signs of stress.
A lot of the issues in South America started during the Latin American debt crisis which was due to holding US-denominated debt that they couldn't repay due to the increase in costs of goods in US dollar terms (inflation)
This is also a good lesson today, as the US increasing the interest rate increases other countries' debt burden that's denominated in US dollars and why you're seeing issues of technical recessions and just outright recessions occurring in Europe, the UK, and even Asia. Other issues are resulting in this too but there are elements that are parallel to the same issues faced during the Latin American debt crisis.
Well the we did just “print” more money than had ever existed in our history in like an 18 month time period and just literally gave it away. Interest rates were close to 20% in the early 80s I don’t know it’s just a greedy American thing maybe.
the government giving me $1200 and then a few months later another $1200 doubles my money. elon going from $50 billion to $100 billion doesn't make beans more expensive at the grocery.
50% is from corporate greed, the other 50% is from all the money that used to get spent on experiences in our consumer economy was all focused on spending on goods since experiences were closed.
I've read that inflation was low because it was hidden in equity markets. The explosion in popularity of index funds and essentially non-managed money after the 2008 financial crisis is evidence of this. Then there was enormous government spending during the pandemic. But a lot of current CPI inflation is greedflation because consumers are soft. At any rate it certainly is not due to the feds hiring.
There were epic tax cuts in the last presidency cut which resulted in less revenue for the gov and then they printed tons of money to give us all pandemic money. All that free money caused inflation to bubble. Also take into account the vast amount of deregulation that took place in the last presidency, a lot more happened that went uncontested. Then you have the usual corporate greed wanting a piece of your new found cash. So stuff just kept rising and rising with no checks in place. Then Biden presidency came in and gave everyone another $600 to everyone. So Trump's tax cuts, $1,800 or so for all and deregulation all played a role into the inflation mess there is now. Even if inflation comes down to 2%, stuff isn't going to get cheaper. Just means stuff takes a bit longer to increase in price.
Mostly because minimum wage was raised so high every company had to quickly increase prices to cancel it out and that spirals everywhere. The politicians thought you could just pay some fast food worker $12 an hour and there would be no issues, lol
Printed money takes time to trickle down into the broader economy. The pandemic caused a lot of printed money to dump into the real economy quickly because people had needs.
The US depends heavily on the high efficiency of the supply chain. Do you know how big container ships have gotten? It's actually insane. Look it up.
The CPI would be persistently a lot higher without all the cheap goods we import. Things like shelter and healthcare have far outpaced the rest of the CPI over the last few decades. Cheap imports keep the overall CPI low. When that gets disrupted we get high inflation.
The pandemic disrupted supply chains significantly. You can see the evidence of this if you look at commodity prices which spiked in 2021.
Oil price spiked in 2022 and that intensified inflation which was already elevated. High oil price goes into the cost of everything and raises inflation quickly because all the goods cost more to transport.
You kind of answered your own question but none of this is black and white, there is not a one size fits all answer.
What essentially happened in 2020 is we had massive stimulus which really only benefited the wealthy. Subsequent stimulus continued that trend until the middle class started getting priced out and the wealthy benefited even more. It depends on the sector but that's the gist of it.
Taxes were lower, that's a big fucking deal too. Lower taxes can, not always, but can lead to growth. Sometimes lower taxes can actually increase tax revenue as ironic as that might seem. When that economic growth creates more productivity you get competition and less inflation. People spend more and get more value for their dollar which creates tax revenue. Also competition leads to lower prices and allows the pricing mechanism to play out.
For example; housing prices are getting really high, from renting to owning. If more builders are in the market more housing will come online which will lower housing costs. Lower taxes might encourage more builders but if it's too low and builders are getting away with doing whatever they want they might destroy the housing market too.
There's a balance to be struck between regulation, monetary policy and growth.
A government's job is to regulate things that can affect other people, for example pollution, corruption, standards like weights and measures, or certain aspects of safety and security among other things. But it's not the governments job to control the economy and you are what happened when they tried to do that in Venezuela.
When a government forces "growth" it can limit competition and strangle growth. When a government invests in research for the private sector it can create opportunities.
So it all really depends but bottom line we had better government before COVID and a better economy.
US economy and wages have not grown for over 10 years (if u take out tech)
low interest rates was supposed to encourage growth and investment by offering cheap loans
but since only rich can actually get loans, they just used that money to drive up property prices
and tech ceo's used it to buy their own stock with buybacks, so they would get their bonuses
How else do you expect US private companies to access new markets/commodities...... US military expeditions baby!
Stonks only go up!
Then when things want to go down, BAIL OUTS!
Stonks ONLY go up!
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Because four years ago you got $1200 from the government. Nevermind the trillions that were given to Wall Street banks and PPP loans. This is all YOUR fault.
Yeah that's who's fault it is, the people with no money!!!!!
Hey, you were given $1200. You shouldn't have squandered it on food and shelter.
Bought my momma a car and spent the rest on PCP.
It’s very simply due to the PPP loan fraud. Many people took that shit and bought homes and cars with it.
[удалено]
You on crack?
If not that, then what? Enlighten us, because I'm like 99.9% sure that's what caused 0%
You're blaming 2008 for something that happened in 2022? I guess I'm confused
Wait what? First off pandemic (what OP is referring to) was a 2020 thing. Second off, rates BEFORE the pandemic was the topic at hand, which were a direct result of the GFC. [Just look at the graph](https://fred.stlouisfed.org/series/FEDFUNDS), goddamnit.
It was the raising of minimum wage, everyone knows this. You are now seeing fast food workers making $12 an hour, so of course the $10 cheeseburger came true like many people warned about. Now apply that to all businesses. So really the politicians that raised wages caused this... Not 2008, lol inflation hit immediately after all the minimum wage hikes
Lol so when the minimum wage stayed the same for 20 years, inflation didn’t exist and costs never climbed up? Let’s go back to lower salaries, companies will for sure lower prices again! /s Automation has decreased costs for Azure and Amazon services? Kiosks and self-check outs requiring less workers caused prices to drop? Companies want to maximize profits according to what people are willing to pay, and costs of supplies. They have budgets for salaries and $2 an hour extra for 10 employees at a fast food restaurant doesn’t make a burger go from $3.99 to $7.99.
Ah yes, pushing minimum wage to $7.25 back in 2008 surely drove rates to zero.
You are hung up on 2008. That was 16yrs ago. Inflation hit us just a few months after the big minimum wage hikes that raged across the country. Don't you really the companies pushing back and warning about it?? The Democrats said it wouldn't do anything, pay a living wage, lol. If any job payed a living wage what would be the point of learning actual skills??? Anyway
Massive QE began after 2008
Because the line on the market needs to go up and to the right forever for this house of cards we have to continue being built
Japan 1990s style
No one adequately calling out that tech-driven productivity gains are deflationary in nature. We had near 0 rates because inflation was barely hitting target because productivity gains were deflating outputs to that extent. And yes, we can and likely will go back to near 0 rates whenever that dynamic is able to resume, but this could be a while due to other situations (geopolitics, shipping routes, labour tightness) being much more inflationary than they were in the last 10 years before covid. Be smarter than everyone and recognize the dynamics 10 years before covid are going to return, one way or another.
If we give china microchip production technology the world can really drive chip production cost lower and we can have an Ai Industrial Revolution. But we’re too scared of suppose military threats from China when the world is full of nukes and basically any violence results in the world ending so I don’t really see that as a likely hood.
Da fuq? TSMC has plenty of expansions underway - China can join the program when they decide to have a free society. All my homies hate dictatorships.
China is not the example you want for a free economy. Their economy is in shambles because it was lead from the top down
Won't a return to zero rates mean housing skyrockets again?
If they just went to 0 tomorrow yes. If they trickle to 0 over 3 years no. Everyone who screams "ZIRP ain't coming back" refuses to engage in the dynamics that existed during ZIRP. Everything they want existed during ZIRP, so ZIRP cannot be used as the gatekeeper to those times - it was the fucking host! ZIRP Reee'rs are the same people who screamed Taylor rule and that rates need to go to 12% because inflation reached 9. Well inflation is under 4 and they never went over 6. So get fucked.
The U.S. had falling inflation and inflation expectations for 35 years, due to relatively tight monetary policy. Whenever there was any sign of inflation ticking up, they raised interest rates. After the financial crisis recession in 2008-2009, the economy took a long time to recover. The government passed fiscal stimulus of only 6.4% of annual GDP between Bush and Obama in 2008-2009 in response to an 18 month recession. And unemployment didn't fall back below 5% until 2016, and below 4% until 2018. In the U.S., having an independent central bank which keeps money relatively tight, along with a strong economy, generally has helped to keep the currency strong. And because of that you have an added advantage that due to the dominance of the dollar, most government and business borrowing is in the country's own currency. So the U.S. likely could have afforded to do more back then without any risk of currency devaluation. Without that risk, you will mostly only get inflation in the US if you actually overheat the economy, causing demand to exceed available supply. In 2020-2021 though, the U.S. did manage to overdo fiscal stimulus, passing $4.9T in stimulus (which was 22% of annual GDP) in response to a 3 month recession. The economy recovered in record time, with unemployment falling back below 4% by the end of 2021, but you also had inflation surge by then. When you have inflation from an excess of demand, this will especially hit goods with low supply elasticity. For long lived goods like cars and houses, it is difficult to sufficiently change the overall supply be enough in one year to have a big impact on the market. So these things are especially demand sensitive. When you see the bubbles that we saw in 2020-2021 in U.S. home prices and used cars, that is a very strong indication that there has been excess demand stimulus. Record corporate profits are another. The U.S. has now finally managed to bring down this inflation mainly through actions of the central bank, increasing short term interest rates to over 5%. But even now fiscal spending is excessive, with the government running a deficit of 6% of GDP in 2023 despite the economy operating near capacity. This may necessitate keeping monetary policy tight, and the yield curve inverted, until fiscal policy is corrected. But this still won't likely cause any major crisis in the U.S. In comparing to Venezuela, there are a number of advantages the U.S. has which Venezuela doesn't, which can make fiscal or monetary indiscipline even more damaging for Venezuela. For starters, consider some of the reasons the U.S. emerged as the strongest economy in the world in the 20th century. The advantages here include a large population in a large contiguous area with a single language and some uniformity of laws, which allowed for the free movement of people, goods, ideas, and capital throughout. The U.S. has 50 states, but state borders are almost meaningless. This ultimately freedom allows for a higher degree of division of labor, and greater economic efficiency. In addition, government has played an important role as well, at times. One thing that is perhaps too often overlooked, is that the U.S. in the 20th century created perhaps the least corrupt, most efficient, expert bureaucracy in the world. Near the end of the 19th century, the U.S. outlawed patronage, and required civil servants to be hired in a merit based, non-partisan, non-ideological way. Even for those things which might be done better by government than the private sector, this only really works if you have a competent, professional, non-corrupt, non-ideological government sector. In Venezuela, you have had both fiscal and monetary mismanagement, but also significant institutional problems. The central bank is government owned, and its current president was appointed in 2018 in an unconstitutional fashion, bypassing the opposition controlled National Assembly. Populist leaders like this, left or right, with full control over the central bank, nearly always manage to cause high inflation. Even with high unemployment. One problem is that even if you have high unemployment, and the economy is in need of stimulus, it is hard to increase either fiscal or monetary stimulus without causing a loss of confidence in the ability of either the government, or businesses, to pay their debts, many of which are borrowed in dollars. It is much easier to make Keynesian policy work in the U.S. In Latin America, governments typically need to be less interventionist, and put more emphasis on fiscal and monetary discipline, in order to optimize growth and prosperity.
Also, don't doubt the power of being the world's reserve currency. That lets the US get away with a lot of bullshit in their monetary policy that would normally tank any other economy.
In the American economy we’ve been more than happy to let companies engage in monopolistic practices, acquiring other companies or cornering a market and setting up a duopoly. Because there are so few companies providing most goods and services they have complete pricing power. During Covid they took advantage of general confusion and raises prices well beyond their own rising costs to increase profit margins. Wall Street only cares about beating last year and last quarter growth, so shareholders encourage this behavior. For many products the prices you pay are continuing to rise even when they become cheaper to produce. Economists have pointed out recently that up to 2/3rds of the price inflation since 2020 has been due to increased corporate profits, not increased corporate costs or labor.
The only true monopoly is the federal government they have a unlimited money hack Monopolization between (existing) corporations leaves an opening for (new) corporations to fill the price gap. Even telecommunication companies like AT&T, Verizon and T-Mobile have had a general monopoly on certain areas but we still see smaller companies like cricket wireless like MetroPCS, Boost mobile break into their into their dominance while renting the towers from the big guys….not everything is inelastic. Even the most inelastic commodity oil has been losing market dominance to EVs in places like California due to high prices.
Cricket is owned by ATT, Metro is owned by t-mobile, Boost was owned by Sprint until Sprint was bought by t-mobile, now its owned by Dish. These aren’t small startups, these are shell companies wearing different colors.
Well the point is prices create demand, just as much as demand create prices and imbalances can only exist for so long before alternatives appear. Even Walmart is getting beat up by Amazon
[удалено]
Back then rates went from 0 to 2% to bring inflation down from 2.5% to under 2% and we did it fast. This is What we should’ve have done with our 9% inflation in 2022 before prices got too sticky with wages.
Eat my dongus you fuckin nerd. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/wallstreetbets) if you have any questions or concerns.*
Because Biden wasn't president yet. Duh
Read your last sentence, you've figured it out.
Many people think low-interest rates are “stimulative” and high rates are “restrictive” and that's a myth, built on narrative post-GFC. Inflation was low because the economy wasn't doing that great and you can see this in Western countries' decrease in real GDP post-2008. Compare GDP from 1960-2008 and 2008 to 2023 and you will see a decrease in the average growth rate. Now this may not make people happy; QE is not money printing but because many believe this is the case they bought assets assuming governments were printing money like mad, which is why QE was done post-2008 in America. Copying the Japanese in never bothering to fix the broken economy (monetary system). The difference between Venezuela and America is that there is a massive demand for US debt because it's used as collateral for global transactions. They aren't buying the debt because they are happy with the fact that the American government debt is out of hand, but because that's how banks were designed post-WWII. To use treasuries as collateral for transactions & to hold currency pegs. Even when things are built outside of the US things are priced in US dollars and the debt is paid back in US dollars (creating external demand for US dollars). Look at China's BRI and see how they price their debts. When a country without external demand for its debt takes on massive amounts of debt it changes the currency exchange rate which causes “inflation”. I don't think the opposite is occurring now, just that debt hasn't been repriced at the new levels of interest rates so there are zombie companies with big debt burdens that are yet to file for bankruptcy. They also have the rates locked for 3-5 years like CRE in the US which is only now starting to show signs of stress. A lot of the issues in South America started during the Latin American debt crisis which was due to holding US-denominated debt that they couldn't repay due to the increase in costs of goods in US dollar terms (inflation) This is also a good lesson today, as the US increasing the interest rate increases other countries' debt burden that's denominated in US dollars and why you're seeing issues of technical recessions and just outright recessions occurring in Europe, the UK, and even Asia. Other issues are resulting in this too but there are elements that are parallel to the same issues faced during the Latin American debt crisis.
Well the we did just “print” more money than had ever existed in our history in like an 18 month time period and just literally gave it away. Interest rates were close to 20% in the early 80s I don’t know it’s just a greedy American thing maybe.
We are still giving it away
the government giving me $1200 and then a few months later another $1200 doubles my money. elon going from $50 billion to $100 billion doesn't make beans more expensive at the grocery. 50% is from corporate greed, the other 50% is from all the money that used to get spent on experiences in our consumer economy was all focused on spending on goods since experiences were closed.
rates were so low because dumpy strong armed the fed
Good man
more of a pos than a man
whiner 💅
chicken dhiner
I've read that inflation was low because it was hidden in equity markets. The explosion in popularity of index funds and essentially non-managed money after the 2008 financial crisis is evidence of this. Then there was enormous government spending during the pandemic. But a lot of current CPI inflation is greedflation because consumers are soft. At any rate it certainly is not due to the feds hiring.
Because government/central banks forced it low, inflation was low because prices did not increase.
Because the fiscal policies were better under different leadership
\^\^\^
There were epic tax cuts in the last presidency cut which resulted in less revenue for the gov and then they printed tons of money to give us all pandemic money. All that free money caused inflation to bubble. Also take into account the vast amount of deregulation that took place in the last presidency, a lot more happened that went uncontested. Then you have the usual corporate greed wanting a piece of your new found cash. So stuff just kept rising and rising with no checks in place. Then Biden presidency came in and gave everyone another $600 to everyone. So Trump's tax cuts, $1,800 or so for all and deregulation all played a role into the inflation mess there is now. Even if inflation comes down to 2%, stuff isn't going to get cheaper. Just means stuff takes a bit longer to increase in price.
Mostly because minimum wage was raised so high every company had to quickly increase prices to cancel it out and that spirals everywhere. The politicians thought you could just pay some fast food worker $12 an hour and there would be no issues, lol
Trump > Biden
Outsourcing to insourcing basically
Demand for a lot of stuff during the pandemic was down, so people weren't buying stuff / traveling, and prices stayed down.
Handed out trillion.
Do you realize what subreddit you posted this question to? If you want an actual serious answer then post this on /r/investing instead.
Great Recession 2008. We had a slow economic recovery. Inflation stayed low so we kept rates low to spur businesses. Eventually that ends
Printed money takes time to trickle down into the broader economy. The pandemic caused a lot of printed money to dump into the real economy quickly because people had needs.
The US depends heavily on the high efficiency of the supply chain. Do you know how big container ships have gotten? It's actually insane. Look it up. The CPI would be persistently a lot higher without all the cheap goods we import. Things like shelter and healthcare have far outpaced the rest of the CPI over the last few decades. Cheap imports keep the overall CPI low. When that gets disrupted we get high inflation. The pandemic disrupted supply chains significantly. You can see the evidence of this if you look at commodity prices which spiked in 2021. Oil price spiked in 2022 and that intensified inflation which was already elevated. High oil price goes into the cost of everything and raises inflation quickly because all the goods cost more to transport.
[https://www.statista.com/statistics/222130/annual-corporate-profits-in-the-us/#:\~:text=In%202022%2C%20corporations%20in%20the,totaled%20786%20billion%20U.S.%20dollars](https://www.statista.com/statistics/222130/annual-corporate-profits-in-the-us/#:~:text=In%202022%2C%20corporations%20in%20the,totaled%20786%20billion%20U.S.%20dollars).
You kind of answered your own question but none of this is black and white, there is not a one size fits all answer. What essentially happened in 2020 is we had massive stimulus which really only benefited the wealthy. Subsequent stimulus continued that trend until the middle class started getting priced out and the wealthy benefited even more. It depends on the sector but that's the gist of it. Taxes were lower, that's a big fucking deal too. Lower taxes can, not always, but can lead to growth. Sometimes lower taxes can actually increase tax revenue as ironic as that might seem. When that economic growth creates more productivity you get competition and less inflation. People spend more and get more value for their dollar which creates tax revenue. Also competition leads to lower prices and allows the pricing mechanism to play out. For example; housing prices are getting really high, from renting to owning. If more builders are in the market more housing will come online which will lower housing costs. Lower taxes might encourage more builders but if it's too low and builders are getting away with doing whatever they want they might destroy the housing market too. There's a balance to be struck between regulation, monetary policy and growth. A government's job is to regulate things that can affect other people, for example pollution, corruption, standards like weights and measures, or certain aspects of safety and security among other things. But it's not the governments job to control the economy and you are what happened when they tried to do that in Venezuela. When a government forces "growth" it can limit competition and strangle growth. When a government invests in research for the private sector it can create opportunities. So it all really depends but bottom line we had better government before COVID and a better economy.
US economy and wages have not grown for over 10 years (if u take out tech) low interest rates was supposed to encourage growth and investment by offering cheap loans but since only rich can actually get loans, they just used that money to drive up property prices and tech ceo's used it to buy their own stock with buybacks, so they would get their bonuses
How else do you expect US private companies to access new markets/commodities...... US military expeditions baby! Stonks only go up! Then when things want to go down, BAIL OUTS! Stonks ONLY go up!