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Fed’s Kaplan is worried about inflation and risk-taking, and wants to announce taper in September
CNBC ^ | August 26, 2021 | Jeff Cox

Posted on 08/26/2021 12:30:17 PM PDT by BenLurkin

Among his reasons is a general belief that the economy can withstand a little less help from the Fed. But Kaplan also said he’s concerned about inflation and “excess risk taking” that has led to “distortions” in financial markets, particularly in bonds.

Inflation has been running around multidecade highs in 2021, and Kaplan said rising gas and housing prices are affecting the lower-income communities in his district.

“What we’re seeing in these communities is inflation affects them disproportionately,” he said. “I think at the Fed we have to take that very seriously.”

Kaplan cited the knock-on effects that high housing prices are having on rents.

He also said he is seeing high levels of risk-taking, particularly in the high-yield end of the fixed income markets.

For both those reasons, he thinks it’s time for the Fed to dial back its accommodation.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy
KEYWORDS: inflation

1 posted on 08/26/2021 12:30:17 PM PDT by BenLurkin
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To: BenLurkin

Good for him for naming the 3 major monthly expenses left out of the Fed’s main inflation rate (the CPI): food, gas, and housing. The three things from our expenses that jump the most with inflation.


2 posted on 08/26/2021 12:33:42 PM PDT by Tell It Right (1st Thessalonians 5:21 -- Put everything to the test, hold fast to that which is true.)
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To: BenLurkin

But...but...Powell told us inflation was transitory.


3 posted on 08/26/2021 12:40:34 PM PDT by Starboard
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To: BenLurkin

So, the Fed has 3 mandates, now? Price stability, economic stability and social justice?!


4 posted on 08/26/2021 12:45:11 PM PDT by BuchananBrigadeTrumpFan (If in doubt, it's probably sarcasm)
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To: BuchananBrigadeTrumpFan

Communists are in charge.


5 posted on 08/26/2021 12:45:47 PM PDT by BenLurkin (The above is not a statement of fact. It is either opinion, or satire. Or both.)
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To: BenLurkin

Most Fed Actions and Government actions in general, always hurt the Lower and Middle Incomes the worst. Either this guy was born stupid or he takes a pill everyday to stay stupid.


6 posted on 08/26/2021 12:46:40 PM PDT by eyeamok (founded in cynicism, wrapped in sarcasm)
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To: BenLurkin

“What we’re seeing in these communities is inflation affects them disproportionately,” he said. “I think at the Fed we have to take that very seriously.”

and that is NOT taught in EC101?


7 posted on 08/26/2021 12:48:15 PM PDT by Chode (there is no fall back position, there's no rally point, there is no LZ... we're on our own. P144:1)
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To: BenLurkin

8 posted on 08/26/2021 12:49:04 PM PDT by rfp1234 (Comitia asinorum et rhinocerum delenda sunt.)
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To: rfp1234

I see what you did there...


9 posted on 08/26/2021 12:50:05 PM PDT by EEGator
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To: EEGator
But will it be full-grown or just a baby?


10 posted on 08/26/2021 12:52:26 PM PDT by rfp1234 (Comitia asinorum et rhinocerum delenda sunt.)
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To: rfp1234

Those are far cuter.

The “shitstorm” is coming. It’s just a matter of when.
I figure after 20% of people get fired for not taking the vaccine, it won’t take long.


11 posted on 08/26/2021 12:53:56 PM PDT by EEGator
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To: EEGator

Between inflation and the fed will kill my 401k, my future prospects are looking bleak.


12 posted on 08/26/2021 12:59:00 PM PDT by BipolarBob (Biden: "I did it but it's Trumps fault".)
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To: Starboard
But...but...Powell told us inflation was transitory.

Maybe the fools running the Pentagon are advising Powell too...

13 posted on 08/26/2021 1:02:22 PM PDT by GOPJ (Press liars will 'blur pictues of people leaving Afghanistan so we can't see how few are Americans. )
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To: BipolarBob

I just assume I’m working until death.
To be fair, I was “semi retired” from 18-26.
I worked every crap job, partied and chased girls.
Better to enjoy your youth than your diaper years...


14 posted on 08/26/2021 1:03:03 PM PDT by EEGator
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To: Tell It Right
Inflation is caused by Government spending of "borrowed" money, which is actually made up out of nothing when the Federal Reserve system buys newly issued Treasury bonds. Both parties benefit, up to a point.

Raising interest rates protects the bankers at the expense of everybody else - including Government It does not stop inflation. That lie is promoted to avoid howling mobs dragging bankers out to the nearest highway overpass and stringing them up.

The lie seems to work pretty reliably. It protects bankers and government officials from focused retaliation.

Inflation stops when the government stops issuing new currency in excess of real economic activity. That is the only way it stops.

Failing Governments always debase their currency to fund their continuing operation. That works until it doesn't. Plenty of recent historical examples to learn from. Or not.

15 posted on 08/26/2021 1:14:58 PM PDT by flamberge (Time has run out. Work with what you've got.)
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To: BuchananBrigadeTrumpFan

It’s that ‘stakeholder’ mumbo-jumbo.


16 posted on 08/26/2021 1:15:20 PM PDT by Tallguy
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To: BenLurkin

In this case inflation is not just being caused by easy money printing. There are ongoing supply chain disruptions, backlogs at the major ports worldwide, shortages of materials, and rising energy costs. Ocean container costs are 4-5 times what they were 2 years ago, as are of course trucking costs (fuel mostly). Producers who can afford to pay extra are getting priority in shipping; and pass that on to the consumer.

It will be worse, and more evident, in 2022 when retailers who have contracted prices for 2021 reset.


17 posted on 08/26/2021 1:26:43 PM PDT by monkeyshine (live and let live is dead)
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To: flamberge

I agree with you totally. I’m merely expressing the mechanics of how they get away with reporting inflation is low so they can keep doing that, all while it’s really running hotter than a ‘78 Chevette low on water. Particularly with how the original Fed mandate was that the Fed is supposed to keep inflation under control.


18 posted on 08/26/2021 1:31:35 PM PDT by Tell It Right (1st Thessalonians 5:21 -- Put everything to the test, hold fast to that which is true.)
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To: BenLurkin
Kaplan cited the knock-on effects that high housing prices are having on rents.

High housing prices are also having an effect on housing prices.

If the Fed is serious about tapering (which I don't think they really are), then the Democrats' $3.5 trillion spending proposal is DOA. There's no way the U.S. government will raise that kind of money on the bond market.

19 posted on 08/26/2021 2:13:13 PM PDT by Right_Wing_Madman
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