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AOC is right: Inflation is solved. That's why central banks are doing the unthinkable a?? cutting rates when we've got full employment and the Dow at 27,000.

AOC is right: Inflation is solved. That's why central banks are doing the unthinkable a?? cutting rates when we've got full employment and the Dow at 27,000.




The economy — with full employment and sky-high stock markets — is screaming for an interest rate rise. But the US Fed and the ECB have signaled they're going to cut instead.




Why are we living in a Bizarro World where an overheating economy generates low inflation, and central banks shovel ever more cash into an on-fire market?




US Rep. Alexandria Ocasio-Cortez touched on the issue in a recent hearing: "Unemployment has fallen three full points since 2014 but inflation is no higher today than it was five years ago."




That's because we have solved inflation. It is no longer a problem. Macro deflationary forces are more powerful than central bank monetary forces.




The next issue is whether governments will be willing to take advantage of the extra fiscal spending space this historic opportunity presents.




Visit Business Insider's home page for more stories.



The economy in Europe and the US is an unusual beast right now. We have full employment, extended GDP growth, and the stock market is through the roof. The S&P 500 has breached 3000, the Dow is at 27,000, and the FTSE 100 is at 7530 — all at or near all-time highs.
Normally, these conditions would be screaming for an interest rate rise. The economy ought to be overheating, inflation ought to be spiraling, wages ought to be going up, along with demand, and employers should be struggling to find extra workers and resources to fill their order books.
But the opposite is happening.
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