Inflation Today is Nearly as Bad as in 1980

One of my favorite people to read weekly is John Mauldin as his newsletters have over 1 million subscribers. He compared inflation from 1980 to today and I will highlight 2 quotes from him.
· “Consumer inflation that households have little ability to control costs (utilities, gas, food, and electricity) is now at 25.5% annually, the second highest ever after 1980 at 27.5%.”
· “Core CPI peaked at 13.6% in June 1980, but would have been 9.1% if we had measured housing inflation the same way as today.”

In other words inflation today is nearly as bad as 1980. I am afraid that consumer costs for the 4 items above will decrease very little without big fiscal policy changes. Thus, I expect consumer inflation will remain elevated above the Fed’s 2% goal for at least another 3 years.

In other inflation news last Wednesday Fed Chairman Powell said, “We understand better how little we understand about inflation.” Holy cow! What a scary admission from the head of the team that is supposed to know economics at an incredibly high level. Powell went on to blame supply chains as the reason for inflation as he “forgot” the trillions of stimulus money created and that the Fed was buying Treasuries and mortgage bonds for 2 years.