The U.S. official annual inflation rate reached 7% in December, the highest annual rate since 1982—and a significant understatement of the actual physical economic reality. Inflation-adjusted average weekly earnings fell 2.3% on a year-on-year basis in December.
In the face of the inflationary blowout, Federal Reserve Chairman Jerome Powell testified before the Senate Banking Committee yesterday, as part of a hearing discussing his renomination as Fed chair. Powell upped the talk of “hawkish” tapering of quantitative easing and interest rate increases. “If we see inflation persisting at high levels, longer than expected, if we have to raise interest rates more over time, then we will,” Powell said. Yahoo News added that “Fed watchers say the central bank is moving quickly to pull forward its efforts to undo its pandemic-era easy money policies.… The Fed now plans on ending that program earlier than expected (with the current plan set to end all purchases by March). The Fed will then look to raising interest rates.”
