The WSJ Says the Lowest Inflation in 50 Years is Killing the Middle Class
Lets take a look: (I've included both the PCE and the CPI)
David Beckworth lends an assist, but about the claim that the Fed is responsible for low real interest rates.
|Note how inflation rises and falls with the utilization rate of manufacturing capacity; the price level is determined by aggregate demand AND supply.|
|Notice how the 30 year rate plummets in 2011 and remains low. And this is on indexed debt, not just reflecting low inflation expectations! Cochrane's refinancing ideas would allow taxpayers to pay these low coupon rates for 30 years into the future, potentially saving trillions in interest costs.|