Mr. Bostic’s Swear Jar

Raphael Bostic – Bedrosian CenterRaphael Bostic is a man of many firsts. He is the  first black man to head a regional Federal Reserve bank . He is the  first openly gay man  to lead a Fed bank. And on Tuesday he became the first Fed president to openly break with the central bank’s mantra that the inflation currently gripping the economy is likely to be “transitory.” 

Here at Breitbart Business Daily and over at our website Breitbart News we have argued for months that the weight of the economic evidence indicated that the current inflationary pressures were not transitory. Far from fading, inflationary pressures were likely to broaden over time. Some of the acute price pressures, such as the leap in used car prices or lumber prices, were likely to soften, but widespread inflation increasingly looks like a stickier problem.

This put us at odds not only with Fed chair Jerome Powell and the Biden administration but also with much of the establishment media. With few exceptions, the establishment media ignored all evidence pointing to stickier inflation. This was especially ironic because under the prior president, those very same outlets constantly claimed consumers were being squeezed by tariff-induced inflation that never actually existed.

Bostic brought a jar with him to his speech on Tuesday. On the jar was a label marked with the word “transitory.” The Atlanta Fed chief explained that at his bank the word had become a swear word. Every time someone used it, he or she has to put a dollar in the jar. It would be better to describe inflation as “episodic,” Bostic argued.

episodic: “occurring occasionally and at irregular intervals.” “volcanic activity is highly episodic in nature”

And the episode is likely to be a particularly long one. The supply chain disruptions that are pushing up prices are unlikely to be brief, Bostic said. As a result, inflation will keep coming on strong. The big risk is that this could unleash a wave of inflation expectations in households and businesses that, in turn, could provide the fuel for even more inflation.

It remains to be seen whether Bostic is a lone gunman at the Fed or if his speech represents a wider shift in thinking.

Alex Marlow & John Carney
Breitbart News Network

%d bloggers like this: