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inflation is going to get a lot worse worse and if we still measured inflation the way we did 40 years ago it'd be 15 percent not seven and a half percent and the rate hikes that they've proposed are completely inadequate in fact the fed is intending to pursue an accommodative monetary policy even if they raise interest rates to one or two percent that is highly accommodative that's the same type of interest rates they had when inflation was below two percent you've got inflation at seven and a half percent even the way they measure it and rising the only way to put out this fire is to have positive real interest rates the fed needs to get above the inflation rate we're not even going to get close so they're going to continue to pour gasoline on the fire and so the entire time the fed is inching up rates inflation is actually going to be moving higher inflation is going to be worse in 2022 than it was in 2021 and real interest rates are going to continue to fall even as the fed raises nominal rates so peter then what happens to the economy the economy is in a lot of trouble it's massive stagflation and the problem is people still don't recognize the box that the fed put us in because there is no interest rate that the fed could you know could put to fight inflation that the economy could withstand if the fed has to fight inflation we not only have a massive recession and a crash in the stock market in the real estate market but we have a much worse financial crisis than the one we had in 2008.
see the reason the fed pretended that inflation was transitory when it obviously wasn't is because they have no ability to fight it and now that they're no longer pretending that inflation is transitory they're pretending that they're gonna fight it when they can't according to the american automobile association figures the retail price of regular gray gasoline has risen 19.3 percent this month to 4.32 per gallon consumer price increases in the united states surged in february to a new 40-year high due to rising fuel food and housing expenses with inflation expected to grow much further following russia's invasion of ukraine the consumer prize index increased 7.9 percent from a year ago following a 7.5 increase in january according to labor department data the widely observed inflation indicator increased by 0.8 in february compared to the previous month indicating higher gasoline food and lodging expenses both numbers match the median forecast of economists excluding volatile food and energy components so-called core prices rose point five percent month on month and six point four percent year on year the numbers show how much inflation was tightening its hold on the economy before russia's war caused a surge in commodity prices notably the highest retail gasoline price on record most experts predicted that february would be the pinnacle for annual inflation but the war would almost certainly result in substantially higher inflation prints in the coming months inflation is not likely to roll over and begin to come down for several more months michael gaben chief u.s economist at barclays plc said on bloomberg television this sets the stage for where we are now and we need to see how long this conflict plays out how disruptive the sanctions regime actually is the federal reserve is poised to raise interest rates next week for the first time since 2018 in order to counteract rising pricing pressures at the same time the geopolitical scenario complicates the central bank's rate hiking cycle in the coming year fed members may become more hawkish if oil price shocks lead to higher and more persistent inflation but they may also become more cautious if sinking consumer mood and dropping real wages begin to weigh on gdp as the battle continues on according to the cpi report food prices increased by one percent over the previous month the highest increase since april the 7.9 increase over february of last year was the most since 1981.
while the full impact of the conflict on the u.s economy is unknown rising prices for oil cereals and metals are likely to spread to other commodities and eventually consumer prices the biden administration restricted russian oil shipments into the united states on tuesday adding to energy price concerns wage gains as a result of a tight labor market have fallen short of inflation separate statistics revealed that inflation-adjusted average hourly wages fell 2.6 from a year ago in february the sharpest drop since may and the 11th straight decrease according to the survey product prices continued to rise in february while annual growth and service expenses accelerated goods inflation increased by 13 year on year the highest rate since 1980.
this included the largest ever annual increase in new automobile and truck costs services prices rose 4.8 year on year the largest increase since 1991. shelter costs grew 0.5 from the previous month and the most since november and are regarded as a more structural component of the cpi accounting for around one-third of the overall index the monthly rent for a primary residence climbed by 0.6 percent the biggest rise since 1987.
motor vehicle repair expenses increased by a record 4.3 percent from january while a personal care index increased by an unprecedented 1.2 percent following the omicron related slowdown in economic activity in december and january hotel and airfare rates rebounded in february even before the war drove price hikes healthy consumer spending good wage gains and persistent supply shortages had sent consumer inflation in the united states skyrocketing housing expenses have grown rapidly accounting for around one-third of the government's consumer price index with apartment vacancy rates reaching their lowest level since 1984.
inflation is expected to rise further in the short future according to economists given the spike in crude oil and gasoline prices since russia's invasion of ukraine it will rise well above eight percent in march capital economist paul ashworth predicted an eventual drop back in energy prices gradually easing of supply constraints and more favorable base effects mean that march should be the peak while both headline and core inflation falling to near 3 by the end of this year he added lydia boswar an economist at oxford economics estimates that if the oil remains at 120 dollars a barrel for the rest of this year which it top tuesday before slipping it would cost u.s households fifteen hundred dollars on average it would also weaken economic growth by about point eight percentage points this year she said many economists have cut their growth estimates for 2022 by roughly a half point to about 2.5 percent across the country individual americans as well as companies are struggling with the inflation spike and trying to minimize its impact gas prices are above the roof especially with spring vacation coming up for the kids vikas grover said while filling up his car monday in herndon virginia it definitely takes our overall budget much much higher maurice brewster the founder of mosaic global transportation a limousine and transportation firm with approximately 100 vehicles in san jose california has been hit hard by rising gas prices brewster was paying four dollars per gallon a few months ago the price on monday was 6.39 inflation has been a killer he said i feel it every day brewster's main source of revenue is the transportation of employees from san francisco to silicon valley corporations such as google meta and merck gas costs are embedded into such contracts and brewster is now passing those costs onto customers brewster now leases limos to customers for weddings wine tours and other events and business has increased as epidemic restrictions have been lifted he intends to impose a 10 gasoline premium on consumer rentals and hopes that his clients would pay it i'm anticipating that it will not stop them from still wanting to get out and having a good time he said i hope i'm not wrong oil prices dipped on wednesday as a result of news that the united arab emirates may persuade other opec members to increase output they did however rise again on thursday the biden white house has attributed much of the inflationary increase to a few corporate behemoths capacities to dominate industries and drive out competition that would otherwise cut prices the administration claims that meat prices are higher because four meat packing companies control the sector in his state of the union speech last week biden stated that the united states should manufacture more items at home rather than overseas in order to avoid the supply chain issues that are plaguing many businesses however creating more competition or more homegrown products would take time and would not result in a reduction in inflation anytime soon republicans in congress and many economists argue that the biden administration's 1.9 trillion dollar financial rescue package which distributed stimulus checks and increased unemployment benefits to tens of millions of households following the pandemic contributed to high inflation by accelerating consumer spending the economic ramifications of russia's war have upended a widely held belief among many economists and at the fed that inflation would begin to fall this spring since prices jumped so dramatically in march and april of 2021 that comparisons to the previous year would indicate decreases that is unlikely to happen if gas prices remain near current levels winograd predicts that inflation might reach as high as 9 march or april do you think the u.s will easily move past the current inflation do leave your thoughts in the comments section below as it for today's video thanks for watching do well like share and subscribe to our channel bye
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