[zarzavat]

Inflation is still going up because there’s a war between Ukraine and Russia. This has caused food and energy prices to skyrocket. The Fed can raise rates to 69% but it’s still not going to cause (say) the grain in Odessa to make its way to people’s stomachs.

Is a certain amount of rate increase justified? Yes, you don’t want an inflation spiral to develop. Beyond that, we are going to have to live with a certain amount of inflation until the situation in Eastern Europe normalizes and the supply chains normalize after COVID. And the interest rates should be kept on the lower side so that companies can still finance solutions to this mess.

[lumost]

If it was just one item you would expect that consumers would cut back elsewhere. Instead we see that they can demand more wages, and companies can demand higher prices even if they are decoupled from wheat.

The latter is only possible if there is too much money in the system, the signal about wheat production gets lost. As the feds money printer doesn’t work evenly, those who are closer to it get more money. I can only speculate that eventually, like any corruption, the effect is to diminish productivity in the real economy in favor of a special class.

[PaulDavisThe1st]

> Instead we see that they can demand more wages [ ... ] The latter is only possible if there is too much money in the system,

When your employee is making gigantic profits, asking for more in wages has no relationship to the money supply.

[bornfreddy]

> ...until the situation in Eastern Europe normalizes and the supply chains normalize after COVID.

They won't "normalize" though (imho), as the reason is not really COVID anymore, it is China gaining ground and trying to do as much damage to the western economy as possible.