Price inflation is definitely a sign that something is broken. From Wolf Richter at wolfstreet.com:
The Fed will tighten “Until Something Breaks?” Wait a minute…
There is a lot of tongue-wagging on Wall Street and in the financial media to the effect that the Federal Reserve will tighten – meaning hike rates and shed assets – until something breaks.
But that’s kind of funny when you think about it. Because the biggest thing that the Federal Reserve is in charge of, the most crucial thing that underlies a healthy economy and a healthy labor market has already broken: price stability.
It broke into tiny little pieces. Instead of price stability, we have raging inflation. And now the Fed is trying to fix it.
But hedge fund gurus and bond kings and stock-fund apostles and other crybabies on Wall Street who don’t give a hoot about this raging consumer-price inflation because they’re rich and don’t mind having to pay a little extra for some stuff, but who’re losing their shirts because asset prices are skidding lower, and they do mind that, well, they’re on TV and on the internet and on Bloomberg and the Wall Street Journal bemoaning the consequences of the end of free money.
