Policy implication of today's inflation data:
1. The Fed needs to hike in March. If two strong jobs reports & another high inflation print should be 50bp. But 25 bp is OK too as long as they're on an every meeting pace.
2. Congress needs to raise the Child Tax Credit.
1. The Fed needs to hike in March. If two strong jobs reports & another high inflation print should be 50bp. But 25 bp is OK too as long as they're on an every meeting pace.
2. Congress needs to raise the Child Tax Credit.
The truth is the President can do very little to lower inflation. He can & should do everything he can on supply (and he is doing most of it already) but won't add up to much.
Congress *could* lower inflation with contractionary fiscal policy but I would leave it to the Fed.
Congress *could* lower inflation with contractionary fiscal policy but I would leave it to the Fed.
What Congress and the President could do is pass something like Build Back Better that provides more relief from these rising prices.
And it would not further add to the price increases if it is paid for.
Throw in a little deficit reduction as insurance if you want.
And it would not further add to the price increases if it is paid for.
Throw in a little deficit reduction as insurance if you want.
P.S. Correction to my first tweet: there is only one more jobs report before the next meeting. Point stands: if that is very strong and the next CPI print is anything like this one then 50 bp would be better.
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