It's always been incredible to me that inflation is treated as though it emerges organically, "aww shucks, I sure wish my money didn't keep losing value randomly!"
This is the result of policy decisions with well-understood outcomes. 0% interest rates for years, printing unprecedented amounts of money during COVID, historically high tariffs, etc.
Now we'll all be 3%-10% poorer, in a single year, yet I see no accountability. In fact, I see people pressuring the Fed to lower (!) rates, the tariffs don't seem to be going anywhere, and government spending and debt are at all-time highs.
I genuinely cannot understand this. If your actions will predictably make everyone poorer, and then the predictions come true, how can this not result in widespread loss of trust in governance?
xphos · 13m ago
I don't think the administration is taking positive steps combat inflation they basically received an economy at 3% and stayed at 3% inflation. Which is above the Fed target of 2%.
Now you might ask why the Fed targets 2% and not 0% and that's because a world where inflation is 0% is brutal for debtors which is basically everyone. The fact that inflations occurs basically guarantees that people who don't over leverage won't be stuck in perpetual debt. That means people can take out loans, start companies and buy equipment to grow the economy. If we had 0% inflation all of that activity becomes much harder.
Another way to see it is:
If you have mortgage inflation comes of the liability of that debt since inflation is not just inflating all the bad parts but all the parts of the economy. And de-risks investment mostly because debt is in nominal terms. Now you cannot have rabid inflation but its not just as though anything above 0% inflation is bad.
ceedan · 53m ago
If only we could find some way to raise taxes for people who make so much money that they wouldn't be impacted by those taxes.....
SamPatt · 43m ago
When life becomes more expensive due to taxation (inflation is effectively a tax), I'm very skeptical that the solution is more taxation.
jjice · 17m ago
I'm no economist, but it feels like just adjusting the taxation the further up the marginal brackets (even creating more marginal brackets at different increments to make the resolution finer) is what would benefit the majority more.
Whether that has negative effects elsewhere, I have no idea and thank goodness I'm not in charge of that.
halestock · 12m ago
You’re arguing that because inflation (which is not a tax) is kinda sorta like a tax, therefore taxation in general isn’t a solution?
SamPatt · 4m ago
Inflation is effectively taxation.
Here's the University of Toronto's economics lesson on the subject:
It's less about raising taxes on people making less than 250,000 a year and more on getting people who make over 1,000,000 pay taxes at all. Sure there's plenty of people who aren't rich that commit tax fraud but the IRS is pretty good at getting them. Getting the millionaires who can throw lawyers at them to waste time makes it not worth it. The rich get richer and the poor get poorer
rich_sasha · 6m ago
I mean, that's a bit of a simplistic take. I'm all for accountability for politicians, but a lot of inflation does kind of happen on it's own.
The biggest inflation shock of recent era was Russian invasion of Ukraine. And, fine, that didn't "just" happen, but hard to blame Western politicians for it. Western governments had to make a choice between inflation and security. You might disagree with the choice, but it's a balance.
Further, inflation and growth are largely affected by a single lever, central bank rates, and making growth better makes inflation worse, in general. Central banks (mostly) diligently try to walk the right path. Of course I'm not referring to cases where politicians just say, hey you there Independent Central Bank Head, lower rates or else. But that case is an exception.
Then, salaries may or may not keep up with inflation. Inflation is generally bad, as businesses have a hard time lowering notional salaries - but they can more easily not increase them with inflation. But as a strict matter they can do it anyway and labour force can get screwed if they don't hold enough bargaining power.
So I would say that largely, yes, inflation does just happen, and it can be exacerbated by some degree (none to massively) by bad politics. But I think to say it's always just bad government is not right.
lapcat · 5m ago
> This is the result of policy decisions with well-understood outcomes. 0% interest rates for years, printing unprecedented amounts of money during COVID, historically high tariffs, etc.
This seems like a bit of an odd take, because the topic is wholesale prices in July 2025, whereas you conflate historically high tariffs, which indeed have begun recently, with other factors from years ago. As you yourself noted, interest rates are now high enough that there's a demand (by Trump) to lower them.
Speaking of the pandemic, you didn't mention supply chain disruptions, panic purchases, and hoarding, which resulted in product shortages and price gouging.
anthonypasq · 30m ago
Inflation only makes people that don't own assets poorer. People that own assets (houses and stocks) are inflation resistant.
chung8123 · 10m ago
I think this only works to a point. For example the house you own will be in a weird situation if the government debt is so big it is paying all the tax revenue to pay debt. The area will likely become less desirable as people leave to go to less debt ridden places.
SamPatt · 9m ago
I own a house and stocks. And cars and other assets. Inflation still makes me poorer.
I have a family of five. No matter how much my home value increases or how well the market does, I still need to pay to live.
ryanblakeley · 3m ago
How about "people who have so much in assets that they can live (and support their family) with the interest they earn on those assets." Those are the people who don't get poorer.
belter · 26m ago
And the companies that those stocks are a value representation of, sell their products to who?
"...Since the 1930s, the research suggests that almost every country suffered its worst real returns during high inflation periods..."
bryanlarsen · 56m ago
Go back and listen to the first 10 minutes of the debate again.
Kamala tried to warn us about this. It's also quite clear that Kamala lost the first 10 minutes of the debate. It's only later on when Trump went full-Trump that Kamala was able to turn the debate around.
You can blame it on Kamala, Trump, the media or the American public, but this sort of stuff is very hard to communicate effectively.
Tariffs are taxes and are inflationary. "China is going to pay" is a lie. People tried to communicate this, but weren't believed, so gave up.
It’s not “people” pressuring the Fed to lower rates, it’s one person in particular. All the other intelligent people around know that lowering interest rates when you just added a boatload of inflationary pressure is idiotic, but that doesn’t count for anything anymore.
SamPatt · 49m ago
I hear you, he's the most vocal at the moment, but low interest rates have been popular among many policymakers and intellectuals throughout the history of monetary policy.
_The Price of Time: The Real Story of Interest_ by Edward Chancellor goes in depth on this, a really interesting read.
JKCalhoun · 48m ago
Markets this morning seem to have noticed.
But the way "the markets" have behaved so far, I expect a full turnaround and record S&P500 numbers by close today.
rescripting · 42m ago
Have they? Major indexes are down a few tenths of a percent as of 10am EST...
JKCalhoun · 35m ago
You're right — but all week when I've checked after some new bad numbers, the markets were up. But, sure, they'll be back in the black soon enough today.
News outlets have been feeding us with annualized rates, which is making this 0.9 figure sound pale, but it's pretty big because it's for July only. Times 12, it means inflation over 10%. The 3.3% annualized figure in the article is because they've been averaging the past 12 months.
Something in July made the prices jack up in a really serious way.
marcosdumay · 1h ago
Just to be pedantic, but the 10% number is the one that is annualized (that is, if an entire year had that monthly rate, what would its inflation be?). It's also not times 12, inflation composes, so it totals to ~11.3%.
The 3.3% figure is annual, normally called "last 12 months" to avoid confusion with a fixed year.
LargeWu · 40m ago
I think that what they're saying is because inflation numbers are typically presented as an annual number (3.3%), when you hear a number like 0.9% it sounds lower to somebody who is not economically literate.
"Prices increased 0.9% in July, which would translate to an annual inflation rate of 11.3%" is one way to say it with more clarity.
Also, Trump has a habit of picking numbers out of context when they suit his personal narrative. For example, not long ago he said something like "The price of gas is down to $1.98 per gallon" when in fact that that number was something along of the lines of the wholesale price. So it's no wonder people are misinformed when they get misleading economic information.
marcosdumay · 38m ago
Yes. I was just pointing that the names are the other way around. The OP's argument is correct.
PaulHoule · 1h ago
Isn't that when the tariffs really took effect?
mlinhares · 1h ago
Not only that but a lot of businesses built inventories before the tariffs took place and we're seeing that gone now, from now on we'll likely see more increases as everything that is showing up has a tariff applied.
isbwkisbakadqv · 1h ago
Is one month really enough data to distinguish signal from noise?
vdupras · 1h ago
You mean that in the sense "is it too soon to say we'll have a 10% inflation year?". Certainly, and I don't mean that. I just want to counter the general "annualized inflation figure numbness". But this is not noise. Prices are a real signal.
jjgreen · 1h ago
Baffling.
treetalker · 1h ago
Clearly a rogue agent in the BLS deep state is adulterating the reported data!
Another thing to watch for is the BLS import prices which show prices excluding tariffs. If these remain flat for July as they did for June, it would be another data point suggesting tariffs induced inflation.
The Trump tariffs / massive billionaire deficit tax cut / chaos start to hit home.
The amazing thing to me is that markets aren't tanking on this news. Are they just pricing in that prices will go up, so revenue with go up, and if margin maintains, profit will go up by a similar amount?
This is the result of policy decisions with well-understood outcomes. 0% interest rates for years, printing unprecedented amounts of money during COVID, historically high tariffs, etc.
Now we'll all be 3%-10% poorer, in a single year, yet I see no accountability. In fact, I see people pressuring the Fed to lower (!) rates, the tariffs don't seem to be going anywhere, and government spending and debt are at all-time highs.
I genuinely cannot understand this. If your actions will predictably make everyone poorer, and then the predictions come true, how can this not result in widespread loss of trust in governance?
Now you might ask why the Fed targets 2% and not 0% and that's because a world where inflation is 0% is brutal for debtors which is basically everyone. The fact that inflations occurs basically guarantees that people who don't over leverage won't be stuck in perpetual debt. That means people can take out loans, start companies and buy equipment to grow the economy. If we had 0% inflation all of that activity becomes much harder.
Another way to see it is:
If you have mortgage inflation comes of the liability of that debt since inflation is not just inflating all the bad parts but all the parts of the economy. And de-risks investment mostly because debt is in nominal terms. Now you cannot have rabid inflation but its not just as though anything above 0% inflation is bad.
Whether that has negative effects elsewhere, I have no idea and thank goodness I'm not in charge of that.
Here's the University of Toronto's economics lesson on the subject:
https://www.economics.utoronto.ca/jfloyd/modules/inft.html
The biggest inflation shock of recent era was Russian invasion of Ukraine. And, fine, that didn't "just" happen, but hard to blame Western politicians for it. Western governments had to make a choice between inflation and security. You might disagree with the choice, but it's a balance.
Further, inflation and growth are largely affected by a single lever, central bank rates, and making growth better makes inflation worse, in general. Central banks (mostly) diligently try to walk the right path. Of course I'm not referring to cases where politicians just say, hey you there Independent Central Bank Head, lower rates or else. But that case is an exception.
Then, salaries may or may not keep up with inflation. Inflation is generally bad, as businesses have a hard time lowering notional salaries - but they can more easily not increase them with inflation. But as a strict matter they can do it anyway and labour force can get screwed if they don't hold enough bargaining power.
So I would say that largely, yes, inflation does just happen, and it can be exacerbated by some degree (none to massively) by bad politics. But I think to say it's always just bad government is not right.
This seems like a bit of an odd take, because the topic is wholesale prices in July 2025, whereas you conflate historically high tariffs, which indeed have begun recently, with other factors from years ago. As you yourself noted, interest rates are now high enough that there's a demand (by Trump) to lower them.
Speaking of the pandemic, you didn't mention supply chain disruptions, panic purchases, and hoarding, which resulted in product shortages and price gouging.
I have a family of five. No matter how much my home value increases or how well the market does, I still need to pay to live.
"Inflation’s Impact on Stock Returns" - https://www.investopedia.com/articles/investing/052913/infla...
"...Since the 1930s, the research suggests that almost every country suffered its worst real returns during high inflation periods..."
Kamala tried to warn us about this. It's also quite clear that Kamala lost the first 10 minutes of the debate. It's only later on when Trump went full-Trump that Kamala was able to turn the debate around.
You can blame it on Kamala, Trump, the media or the American public, but this sort of stuff is very hard to communicate effectively.
Tariffs are taxes and are inflationary. "China is going to pay" is a lie. People tried to communicate this, but weren't believed, so gave up.
_The Price of Time: The Real Story of Interest_ by Edward Chancellor goes in depth on this, a really interesting read.
But the way "the markets" have behaved so far, I expect a full turnaround and record S&P500 numbers by close today.
Something in July made the prices jack up in a really serious way.
The 3.3% figure is annual, normally called "last 12 months" to avoid confusion with a fixed year.
"Prices increased 0.9% in July, which would translate to an annual inflation rate of 11.3%" is one way to say it with more clarity.
Also, Trump has a habit of picking numbers out of context when they suit his personal narrative. For example, not long ago he said something like "The price of gas is down to $1.98 per gallon" when in fact that that number was something along of the lines of the wholesale price. So it's no wonder people are misinformed when they get misleading economic information.
Another thing to watch for is the BLS import prices which show prices excluding tariffs. If these remain flat for July as they did for June, it would be another data point suggesting tariffs induced inflation.
"Trump's pick to lead economic data agency floats ending monthly jobs report" - https://www.bbc.com/news/articles/czerwl2xee4o
The amazing thing to me is that markets aren't tanking on this news. Are they just pricing in that prices will go up, so revenue with go up, and if margin maintains, profit will go up by a similar amount?