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PAM111 t1_jacltoi wrote

Reply to comment by Due-Employee9272 in The Fed is yet to catch up to the Taylor Rule estimate by Surlax

We are experiencing stagflation. This is the worst case scenario because the Fed waited to long to act.

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prettyprtyprtygood t1_jad2zfx wrote

It's pretty clear that we aren't experiencing stagflation. In stagflation, the inflation rate has to keep increasing even as growth slows, and stagflation is specifically characterized by high unemployment and high inflation at the same time.

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Unemployment is low, inflation rate is decreasing as growth slows, and the inflation adjusted GDP is still growing. The only argument for stagflation is that everyone is lying about everything and that the government is controlled by lizard people.

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MoondropS8 t1_jad2mki wrote

You’ll have to wait until unemployment gets bad to call it that

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goldenloi t1_jad9vra wrote

A lot of people think the current numbers are BS, myself included. At very least, they don't reflect the true state of the employment market because of the way they are calculated.

But you're right. I think it will get there in the second half of this year.

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phony_squid t1_jadcy2i wrote

That’s what I’m waiting for. I’m not worried until or unless unemployment really heats up. The way I see it, the economy is currently working for almost everybody.

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PAM111 t1_jad2u8g wrote

Technically true. I believe we've locked in conditions that ensure this. Fed is too pussy footed to do what's needed. Remember transitory?

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Due-Employee9272 t1_jadar2c wrote

Agreed on the fed taking to long to act, it was a dangerous choice.

As for stagflation, you're technically wrong but I agree with you. If we didn't have a pandemic where it was hard to find workers, we wouldn't have companies hoarding employees like we have now. But over time, I expect unemployment to rise as the rate increases take effect.

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