⏳💰 Inflation Wahala Never Finish” – Wetin Economists Dey Fear
E dey like say di wahala of inflation don finally start to reduce for di pipo of America. Petrol price don comot body, egg price don cut like half compared to wetin e bin be for January, and price for different different tins no dey rise as e dey rise before. 🥚🛢💵
But one pesin never still happy: Jerome H. Powell, wey be di Oga for Federal Reserve. 🏦👨💼🚫
Federal Reserve don dey fight dis inflation wahala for over 15 months now, dem even raise interest rate go reach 5 percent, all dis na to make price rise come down to beta level. Last week, dem announce say dem no go increase rate for June, dem wan see how di one wey dem don do go affect di economy. 🔄⏳💰
But Oga Powell talk say e too early to shout say we don win di fight against price rise. Why e talk so? Even though petrol price don drop and food price no dey rise like before, all dis tin dey hide di main mata. And di main mata be say inflation wey no put food and fuel join still dey high, as tins like dentist service, hair cut, school fees and car insurance price dey rise fast fast. 🏥💈🎓🚗💰
Last week, di people wey dey work for Federal Reserve sharp sharp raise dem forecast for how high inflation go be by di end of 2023. Dem talk say e go reach 3.9 percent, e pass di 3.6 percent wey dem bin predict for March and e even pass dem 2 percent inflation target two times. 🎯📈🔝
In short, di economy dey show two different picture. Even though di big price rise don pass for consumers – wey be good news for many people, and President Biden and him advisers dey celebrate – Federal Reserve policymakers and plenty economists outside still see reason to dey worry. Dem believe say di central bankers fit need to do more to reduce growth and control demand to stop say high price increase go come stay permanent. 🎉🎈😬
We dey make progress, but di progress slow pass wetin we expect, na wetin Kristin J. Forbes, wey be economist for Massachusetts Institute of Technology and former policymaker for Bank of England, talk. Inflation stubborn pass wetin we hope, na him she add join. 👩🏫📚💡
Consumer Price Index inflation report wey come out last week show say inflation continue to reduce well well for May. Dis measure dey help Federal Reserve to define their 2 percent target. Di new Personal Consumption Expenditures figure go come out on June 30. ⏱🗓📉
White House officials, wey don dey defend demself for months about di role wey pandemic spending under President Biden play to increase demand and price, dem dey happy about di recent inflation cool down. 🏛💼😀
Lael Brainard, wey be director of the White House National Economic Council, talk say, We don see big reduction in inflation, e reduce pass 50 percent. She add say di current way inflation dey go show say e fit return back to normal quick quick as economy dey slow down, and she dey hope say dem no go need to increase unemployment to stop inflation. 👩💼📉🕰
But plenty economists no get dis kind confidence. E be like say di things wey don help inflation come down so far na the ones wey people dey expect, kind of like di easy fruit to pluck for disinflation. 🧐🍎🍏
Pandemic been scatter supply chain, but e don heal now, so goods price increase don slow down. Oil price wey rise because of Ukraine war don come down.
But plenty more dey come: House rent price start to rise for 2021 as people dey move come out or relocate because of di pandemic. Now landlords don see say people wey dey rent no fit pay higher price, so dem cool down and dis one don slow enter official inflation data. 🏠💸📉
Wetin remain na di fast price increase for services wey no include housing. Dis one na broad category, and e include things wey labor-intensive, like hospital care, school fees and sports tickets. Dem price dey rise when salary increase, because employers dey try cover their higher costs and because customers wey dey earn more fit pay more without reducing their spending. 🏥🎟💵
Jerome Powell, di Oga for Federal Reserve, talk say we never reach our inflation target of 2 percent, and we dey very focused on getting back to 2 percent. E add join say today situation na unusual one because we don achieve maximum employment goal, but we never reach di goal for inflation. 👨💼🏦🎯
Economists dey try figure out if economy dey cool down enough to make sure say inflation go fully return to normal.
Federal Reserve officials dey expect say dem go raise interest rate to 5.6 percent this year, make dem do two more quarter-point rate moves wey go push rate to di highest level since 2000. 📅📈🔝
But if e no happen like that, di next stage for di fight against inflation fit be di one wey go pain pass.
As higher borrowing costs dey make consumers and companies withdraw, dem dey expect say e go lead to less employment and fewer job opportunities. Di slowdown fit even leave some people without work at all. 😟📉🚫
In any case, Jason Furman, wey be Harvard economist, talk say make we no quick quick conclude about di way wey inflation go take follow base on di progress wey we don make so far. 👨🎓📚🔮
People don dey too quick to declare victory on top inflation, na him e talk.
NOW IN ENGLISH
⏳💰 Inflation Trouble Not Over Yet” – What Economists Fear
It seems that the trouble of inflation has finally begun to reduce for the people of America. Gas prices have dropped, the price of eggs has cut like half compared to what it was in January, and prices for various items are not rising as quickly as before. 🥚🛢💵
But one person is still not happy: Jerome H. Powell, who is the Chair of the Federal Reserve. 🏦👨💼🚫
The Federal Reserve has been battling this inflation trouble for over 15 months now, they even raised the interest rate up to 5 percent, all in order to bring price increases back to a better level. Last week, they announced they would not increase rates in June, wanting to see how the actions they had taken would affect the economy. 🔄⏳💰
But Chairman Powell stated that it’s too early to celebrate victory in the fight against rising prices. Why so? Even though gas prices have fallen and food prices aren’t rising as before, these factors are masking the main issue. And the main issue is that inflation excluding food and fuel is still high, as the cost of services like dentistry, haircuts, tuition, and car insurance continue to rise rapidly. 🏥💈🎓🚗💰
Last week, the Federal Reserve officials sharply raised their forecast for how high inflation would be by the end of 2023. They now see it at 3.9 percent, exceeding the 3.6 percent they had predicted in March and double their 2 percent inflation target. 🎯📈🔝
In short, the economy is showing two different pictures. Even though the substantial price increases have passed for consumers – which is good news for many people, and President Biden and his advisers are celebrating – Federal Reserve policymakers and many economists outside still see reasons to worry. They believe the central bankers may need to do more to slow growth and control demand to prevent high price increases from becoming permanent. 🎉🎈😬
We are making progress, but the progress is slower than we expected, said Kristin J. Forbes, an economist at the Massachusetts Institute of Technology and former policymaker at the Bank of England. Inflation is more stubborn than we had hoped, she added. 👩🏫📚💡
The Consumer Price Index inflation report released last week showed that inflation continues to reduce significantly in May. This measure helps the Federal Reserve define their 2 percent target. The new Personal Consumption Expenditures figures will be released on June 30. ⏱🗓📉
White House officials, who have been defending themselves for months about the role that pandemic spending under President Biden played in boosting demand and prices, are pleased about the recent cooling down of inflation. 🏛💼😀
Lael Brainard, the director of the White House National Economic Council, said, “We have seen a significant reduction in inflation, by more than 50 percent.” She added that the current trajectory on inflation offers reasons for optimism that it could return back to normal quickly as the economy slows, and expressed hope that crushing inflation would not necessarily require a big jump in unemployment. 👩💼📉
But many economists are less optimistic. That’s partly because most of the factors that have helped inflation fall so far have been widely anticipated, sort of the low-hanging fruit of disinflation. 🧐🍎🍏
The pandemic had disrupted supply chains, but they have since recovered, allowing for the slowing of goods price increases. The spike in oil prices tied to the Ukraine war has also faded.
There may still be more to come: Rents jumped in 2021 as people moved out on their own or relocated due to the pandemic. They have since cooled as landlords have realized that renter demand can’t bear higher prices, and this moderation is slowly feeding into official inflation data. 🏠💸📉
What lingers are relatively rapid price increases in services outside of housing. This broad category includes purchases that tend to be labor-intensive, like hospital care, school tuition, and sports tickets. These prices tend to rise when wages increase, both because employers try to cover their higher costs and because consumers who are earning more have the ability to pay more without cutting back. 🏥🎟💵
Jerome Powell, the Chairman of the Federal Reserve, said, “We’re very far from our inflation target of 2 percent, and we’re very focused on getting back to 2 percent.” He added that “today’s situation is unusual in that we’re overachieving on the maximum employment goal, but we’re far from achieving the inflation goal.” 👨💼🏦🎯
Economists are trying to figure out if the economy is cooling enough to ensure that inflation will fully return to normal.
Federal Reserve officials expect to raise interest rates to 5.6 percent this year, making two more quarter-point rate moves that would push rates to their highest level since 2000. 📅📈🔝
But if that doesn’t happen, the next phase of the fight against inflation could be more painful.
As higher borrowing costs prompt consumers and firms to pull back, they are expected to result in less hiring and fewer job opportunities. The slowdown might even leave some people out of work altogether. 😟📉🚫
In any case, Jason Furman, a Harvard economist, warns against jumping to early conclusions about the path ahead for inflation based on the progress made so far. 👨🎓📚🔮
“People have been too quick to declare victory on inflation,” he said.
