Trump's Lackies Say He Is Powerless to Increase Affordability Because of Things Biden & Powell Did Five Years Ago: CHARTS OF THE DAY
PCE chain-index inflation held near 2.75% for three and a half years starting in the spring of 2022. Since the start of last winter, it has run 3.75%—and rising. Now Trump has chosen a new Fed chair precisely because Trump thinks he will not fight it, plus tariffs, war, and deportations. This is a self-inflicted inflation surge. So far it is small, and it will stay small as long as expectations stay anchored. But. And it is not helping that Trump and jis lackeys keep pointing at and blaming 2021:
The reopening inflation of 2021-2022 came to an end in June 2022. For the next 3.5 years, PCE chain-index inflation—the kind of inflation that Alan Greenspan decided was his favorite indicator—averaged only 2.76% per year. Now, Trump and his Republican lackeys in the Senate have, as of May 22, installed a new Fed Chair, Kevin Warsh, whom Trump believes will work hard to keep the Federal Reserve from taking any steps to reduce inflation. Rather, Trump trusts Warsh to let it continue to creep up. (He may be wrong, and I will try to go there later on this week.) And, starting at the end of 2025, Trump’s inflation-boosting tariff, war, and worker-deportation policies all started to come home to roost.
In the 2/3 of a year since the end of 2025, PCE chain-index inflation has been running a full percentage-point higher at an average of 3.75% per year, and its trend is slowly climbing.
What is responsible for this increasing unaffordability situation?
Well, the Trump lackey line is: not the chaos-monkey-in-chief’s tariffs, or the chaos-monkey-in-chief giving Putin reason to hope rather than settle his disastrous Ukrainian adventure, or the chaos-monkey-in-chief causing deadly chaos in the energy production centers of the Middle East. Rather, responsbility rests on things that Joe Biden (and Jay Powell) did back in 2021 that had been fixed more than four years ago. (Things I thought back then ex ante were very reasonable, and that still look like they had benefits massively greater than their larger-than-I-expected costs ex post, and I may go there later on this week as well.)
CNBC: <https://bsky.app/profile/atrupar.com/post/3msq4d5l43o2v>: ‘Polling indicates that Americans feel an inflation problem, are feeling costs go up. How do you address that?
Kevin Hassett: ‘We understand what people are feeling. And in part it came about because of the runaway inflation of Joe Biden. Inflation has decelerated a lot. But it’s still if you look at the latest numbers we are back where we want it. If you look at the twelve-month number we have still got some progress to make…