“The inflation genie is out of the bottle,” as per one financial firm, as traders and consumers get stumped by rising prices.
Namely, on Friday, the worries surrounding the growing inflation were felt across the country.
For one, the consumer sentiment index has fallen to its lowest in ten years. Consequently, investors flocked to gold, whereas average Americans just stood there trying to figure out the ever-rising prices.
In fact, the concern over inflation has lingered for months and was only overshadowed by the anxiety surrounding the economic slowdown.
Hence, experts are now concerned with “feedback loops” between inflation expectations and actual inflation.
This is why professionals, such as Derek Tang from Monetary Policy Analytics in Washington, say that once the inflation process starts, there’s not much that the Fed can do.
Société Générale strategist, Subadra Rajappa, has a similarly grim approach. Specifically, Rajappa states that inflation is coming from more permanent sources and that if the Fed doesn’t react quickly, recovery might take a long time.
Moreover, as inflation escalates, consumers worry that lawmakers aren’t competent to deal with the issue effectively. Curiously, this was one of the main factors identified in the latest consumer sentiment report issued by the University of Michigan.
What’s more, Jay Hatfield, an investor from Infrastructure Capital Advisors, is concerned that the Fed has lost its grip on inflation, potentially leading to even more issues down the road.
Meanwhile, average Americans, like 63-year old retired Greg Jones from California, feel the effects of inflation directly on their skin. Not only is the average American’s debt $92,72, but now citizens also have to deal with rising prices.
As Greg Jones said, his favorite burrito costs $12 now instead of $7 and he also had to pay $100 for a single ticket to see banjo virtuoso Bela Fleck.
As he said, he would love to support live performances. However, with these prices, it’s almost impossible.