Larry Kudlow: Fed in the Hole, Running Six Percent Inflation Rate Beating Increase in Wages

‘I think this is temporary’

EXCERPT:

KUDLOW: "Well, the thing is — I mean, Gerri Willis is right. A lot of the spikes in the Consumer Price Index is coming from post-pandemic economic recovery shortages, especially of chips, used car prices are absolutely soaring. You know, supply chains backed up in the port of L.A. and long Beach, California. Now, a lot of that is loosening up. And I kind of think this is temporary. But whatever it is, it puts the administration in a hole, and it puts Jay Powell and the Fed in a hole because it is doing some damage, and if you’re running a 6 percent inflation rate year to year, that's beating the increase in wages, which is part of the recovery. So what's the Fed going to do? You’ll see. I think the Fed's going to start changing their language. All right. I don’t think they’re going to change the rate, the target rate, the Fed funds rate. You’ll see them change their language about buying fewer Treasury securities, okay, the so-called balance sheet expansion.” 

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