Incumbent politicians hope you’ll forget about inflation before November 5, but it’s not gone. The Federal Reserve Bank of Cleveland President Beth Hammack recently spoke at a conference hosted by the Cleveland Fed’s Center for Inflation Research and told the audience, “We have made good progress, but inflation is still running above the [Federal Open Market Committee’s] 2% objective.” Michael S. Derby of Reuters reports:
Federal Reserve Bank of Cleveland President Beth Hammack said Thursday inflation pressures have been easing but still have yet to return to where they need to be.
“We have made good progress but inflation is still running above the [Federal Open Market Committee’s] 2% objective,” Hammack said at conference on inflation issues held by her bank. She did not offer a view on what she believes monetary policy should do in the future. She did note Fed rate hikes between the spring of 2022 and the summer of 2023 played a role in lowering inflation.
Echoing recent comments by Fed Chairman Jerome Powell, Hammack, who is the newest regional Fed bank president, said that despite progress on getting price pressures down it is too soon to say the job is done.
Hammack noted “it has not been a straight line of progress towards returning inflation to our 2% goal,” while adding after an uneven start to the year, “in recent months, the readings have generally improved since its peak in June of 2022.”
The policymaker also noted “remarkably, this disinflation process has progressed with notable strength in the labor market and the economy in general.”
Action Line: This is a reminder that disinflation is not deflation. Prices aren’t going down. They’re just not rising as quickly. The value of your dollar isn’t increasing. It’s just decreasing at a slower rate. Your standard of living is still going down, but not as quickly. Take a look at food and beverage prices below. They’re not declining; in fact, food and beverage inflation has begun to accelerate once again. Yes, President Hammack, there’s still work to be done on inflation. Please remind Jerome Powell and the other Fed Governors before it’s too late. Click here to subscribe to my free monthly Survive & Thrive letter.
