The last time the Fed fought entrenched inflation, in the 1980-1982 period, an oil supply shock pushed the Fed into raising rates even though inflation had peaked and was coming down. In the chart below, the blue is the inflation rate, and the brown is the 3-month T-bill rate. Short rates did not peak until a year after inflation peaked. (Memo to Fed: you probably don’t need to raise rates, unless you want to create a recession.)
We are also within a month or so of tying the lag from 2-year to 10-year Treasury yield curve inversion to the onset of recession at the end of the 1970s, at about 19 months.
And, of course, if we could get an honest unemployment rate out of the BLS, I could show we are probably close to the self-organized collapse of confidence that occurs when the unemployment rate rises above its adaptation level. (If you’re new here, please read the post below to understand what I’m discussing.)
Pray for peace! Have a great day! Call your Congresspeople and tell them you don’t want to send any more money to Ukraine or Israel! The Capitol switchboard is at 202-224-3121.