A Benjamin Cole post
An important chart ran in University of Chicago scholar John Cochrane’s blog recently, and it revealed that at any point in time Wall Street economists predict interest rates will go higher, almost certainly a reflection of inflation fears.
I suspect this chart could be fitted out back to the 1970s, and would look the same. I can recall no period in recent U.S. history in which many prominent economists were not warning that higher inflation, often accelerating or galloping, was pending, unless it was when some shrieked above the chorus that hyperinflation was imminent.
Let us add another favorite chart of mine, showing that if you want to cut inflation by 1%, then hike the unemployment rate by 5%.
That’s the “Phillips Curve,” which in modern times needs to be renamed the “Phillips Phlat-line.”
With the two above charts, an inescapable conclusion is reached: U.S. economists…
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