Today’s Producer Prices Index Final Demand printed at a whopping 7.3% YoY.
At the same time, Federal Reserve Chairman Jerome Powell Says Achieving ‘Substantial Further Progress’ a Ways Off
Here is a chart of PPI Final Demand YoY against average hourly earnings YoY. Average hourly earnings have returned to pre-Covid levels (yellow line).
Or it is Powell wants to be reappointed as Fed Chair and is bending over backwards to appease the free-spending Biden Administration?
Powell: “Strong demand in sectors where production bottlenecks or other supply constraints have limited production has led to especially rapid price increases for some goods and services, which should partially reverse as the effects of the bottlenecks unwind,” Powell said. “Prices for services that were hard hit by the pandemic have also jumped in recent months as demand for these services has surged with the reopening of the economy.”
But how will Fed monetary policy cure bottlenecks, other that drive prices higher?
