Sonu Varghese
Where Do Gas Prices Go From Here
I wrote last week that consumer confidence is rising on the back of falling gas prices. Gas prices have dropped for 13 consecutive weeks, from a peak over $5 a gallon to about $3.75 per gallon. The good news is that it will have a deflationary impact on headline inflation data for August (released this …
Sonu Varghese
September 13, 2022
Consumer Confidence is Rising as Gas Prices Fall
It really is as simple as that, as the chart below illustrates.
Sonu Varghese
September 8, 2022
The labor market is showing no signs of pain
Last week Federal Reserve Chair Jerome Powell said that the Fed is focused on its job of getting inflation down to their 2 percent target. As I wrote at the time, he also noted that there would be an unfortunate cost, as getting inflation back to target will bring pain to households and businesses. Put …
Sonu Varghese
September 2, 2022
Is the Economy Growing, or Shrinking?
Depends on what you’re looking at. Economic output as measured by GDP (Gross Domestic Product) fell 1.6% in the first quarter and 0.6% in the second quarter. So, it’s perfectly reasonable to conclude that the economy shrunk in the first half of the year. In other words, we were or are in the middle of …
Sonu Varghese
August 31, 2022
What the student loan cancelation means for economic growth and inflation
The Biden administration made a huge announcement regarding student loans on Wednesday (August 24th). An announcement was expected given the upcoming expiration of the moratorium on student loan payments. The moratorium was originally part of the CARES Act, as part of income relief, and set to expire in September 2020 – but it was extended …
Sonu Varghese
August 26, 2022
The Fed will keep at it until the job is done
So said Fed Chair Jerome Powell in his much-awaited Jackson Hole speech. The “job” in this case refers to getting inflation down to their 2 percent target. That was really the big story.
Sonu Varghese
August 26, 2022
Why the Inflation Reduction Act Isn’t Really About Inflation and Other Questions Answered
The largest deficit reduction bill since 2011 has crossed the finish line. President Biden signed the Inflation Reduction Act into law August 16, and despite its name, it’s not expected to impact inflation in a meaningful way, particularly over the short term. Rather, it addresses the energy sector, taxes and health care costs, and signifies …
Sonu Varghese
August 24, 2022
Recession? Not if You Look at Industrial Activity
Whether we are in a recession is top of mind right now, with good reason as Americans experience the highest inflation in four decades. Not to mention the fact that we just got two consecutive quarters of negative GDP growth, which, on the face of it, appears to be an open and shut case that …
Sonu Varghese
August 19, 2022