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by jfengel 1936 days ago
It's already well above 3%, if you could include the stock market in the metric.

That's the problem facing Yellen: not just doing enough, but doing something that won't just end up inflating the kinds of assets owned by the wealthy. Consumer prices have been stable because despite the increase in money supply, consumers as a whole were treading water (at best) even before the pandemic.

She would be happy to do something that caused CPI to get above 3%. It would mean the Fed could finally take the punch bowl away. They've been refilling it for well north of a decade, and it drains as fast as they fill.
1 comments
voisin 1936 days ago
On topic and timely WSJ article on inflation: https://archive.is/AsvgT

It isn’t just stocks. Our inflation measures make a mockery of including households’ largest expense - housing.

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refurb 1936 days ago
Why does it make a mockery? It’s included in CPI and for a large swath of America housing isn’t growing by 10% each year, so we’d expect housing inflation to be moderate on average.
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jazzyk 1936 days ago
... and healthcare, which has been rising 13%-15% every year
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voisin 1936 days ago
Inflation numbers don’t include healthcare?!
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jfengel 1936 days ago
Yes, they do. It's 8.833% of the index. Health insurance makes up 13% of that part, or about 1% of the overall CPI. So even a large increase in health care contributes only a tiny amount to inflation.

https://www.bls.gov/cpi/factsheets/medical-care.htm

Of course, these are averages. If something catastrophic happens to you, it can easily consume your entire budget.

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ac29 1936 days ago
They account for health insurance in a different way than you might think just looking at those 13% / 1% numbers might suggest. The short version is that if you pay $10000 in insurance premiums, but get $8000 of health care costs covered, they call that $2000 of insurance cost (since youd be paying the $8000 out of pocket otherwise). Of course, with the state of insurance in the US, its more complicated that that in reality.

I think the overall 8.8% figure is probably reasonably accurate for total health care costs, on average.

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