The Federal Reserve is mandated to control inflation. Using a computer program that is hopelessly out of context with the current economic conditions, they raised their rate by a half of 1%.

The program doesn’t account for the supply disruptions causing shortages. The disruptions are causing containers and their ships to triple their cost. The price of petroleum almost doubled year-over-year due to increased demand and supply shortages caused by sanctions on Russia. Food price increases are caused by Putin’s war, climate and fuel costs and increased wages for drivers.

Shortages of computer chips means new cars – if chips are available – may cost more than manufacturers’ suggested price. Used cars cost more because of fewer trade-ins. Rental prices for shelter are higher because more people are needing a place to live and fewer houses and apartments are being built, which causes rent and house prices to increase.

With the price of petroleum up, gasoline is much more expensive. Because we are sending natural gas made into LPG to Europe, the price has almost tripled year-over-year. Since 40% of our electricity is generated by burning natural gas, electricity prices are increasing proportionally.

These items, along with a few others, are what the Fed uses in deciding what the inflation rate is and how to reduce it with interest rate increases. None of the above is something the Fed can control with any method, so they are powerless to reduce the rate of inflation. They may interfere with the on-shoring manufacturing, which in and of itself raises prices. Not doing so keeps us subservient to our enemies and prolongs supply disruptions.

Chuck Johnson

Morris