THE ANATOMY OF INFLATION (published print version)

by Dr. Jack Rasmus
Copyright 2022

The focus of the US media and economists for the past several months has been increasingly on inflation. In recent weeks, however, US policymakers awoke as well to the realization that inflation is chronic, firmly embedded, and growing threat to the immediate future of the US economy.

A qualitative ‘threshold of awareness’ was reached this past week when the US central bank, the Federal Reserve, accelerated its pace of rate hikes by 75 basis points—purportedly to bring the rate of price hikes under control. Whether the Fed can succeed in taming inflation and do so without precipitating a recession remains to be seen but is highly unlikely. Taming inflation without provoking a recession is thus the central economic question for the remainder of 2022.

Clearly some think this is possible—i.e. that further rate hikes will moderate the pace of inflation without driving the real…