This was a mind shift for me, inflation applies to stock prices too. The US cannot cut spending enough to prevent the debt death spiral. Inflation and growth are the only options. Everyone wants growth but it's hard to get, nobody wants inflation, but it's easy to get. Inflation is here to stay.
Dylan16807|5 months ago
Well sure it is, we aim for some inflation on purpose.
If you mean inflation above 2% is here to stay, maybe, but 2% was an arbitrary target anyway. It doesn't make much difference whether it's around 2% or hovering between 2% and 3%.
If you think it's going to go much higher I'd like to hear why.
tobias3|5 months ago
It is mainly about credibility.
If they want 3% instead of 2%, they should hit the 2% target first, keep it there for a few years, then increase to 3%.
eagerpace|5 months ago
JumpCrisscross|5 months ago
Inflation, growth and defaults.
Trump has already de facto seized, and the Republicans in the Congress ceded, the power of the purse. Do you really think impounding interest payments is beyond the pale of possibility?
eagerpace|5 months ago
quickthrowman|5 months ago
I truly hope so, otherwise the only buyers for US Treasuries will be Social Security.
Defaulting on sovereign US debt would be something that would make me rapidly look for an exit from the United States.
xnx|5 months ago
It will happen in phases: 30 year bonds become 100 year bonds, foreign countries get payments, delayed, etc.