Morning Wire Inflation Rises & Surprises | 10.13.22
Oct 13, 2022
Inflation is sticking around, with the Producer Price Index showing surprising increases. The Biden administration is rolling out a new diversity and inclusion initiative aimed at the federal workforce. An investigation into Border Patrol's controversial actions towards Haitian migrants reveals shocking details, raising questions about accountability. The discussion covers how these issues intertwine with economic policies and social movements, highlighting a shifting landscape in both government and workplaces.
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Stubborn Inflation
- September inflation rose by 8.5%, and the Producer Price Index rose 0.4%, exceeding predictions.
- This persistent inflation suggests the economy isn't slowing as anticipated, despite aggressive rate hikes.
Fed’s Role in Inflation
- The Federal Reserve's prolonged stimulation, starting in 2008 and continuing through the pandemic, fueled the current inflation.
- They should have started pulling back around 2015-2016, but didn't recognize the issue until 2022.
Predictions and Potential Impacts
- Expect a 75-basis point rate hike in December and a potential split Congress in the midterm elections.
- A split Congress could benefit the market by creating gridlock and preventing further excessive spending.