Toward Stagflation?

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Commentary  In February, the United States recorded the fastest inflation print, 7.9 percent, since January 1982. In January 1982, the federal funds rate was 13.2 percent (on average). On March 16, the Federal Reserve raised the federal funds rate to a range of 0.25–0.50 percent. It’s a joke, really. Like I wrote in my previous article, the most pressing economic issue relating to the war in Ukraine is its likely effect on inflation. While we are also likely to face some serious banking issues down the line, the approaching inflation shock is probably going to be so massive that it can act as a trigger for much wider economic calamity. That’s why it’s rather perplexing to watch some economic commentators arguing that central banks should dismiss ravaging inflation, because it’s due to a “spike in energy prices.” A spike in energy prices is definitely happening, but how about wheat (up …

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