I’m still seeing this: “What the heck did he just charge me? I need to raise my own rates again.”  Inflationary impulses still seem primed to me.

Dr. Summers says housing is 30% of the core CPI calculation.  There may be some local housing bubble rents popping, but it seems the majority of housing owners and service providers are still raising rates…substantially.  Re-rents on mediocre three bedroom homes are up 44% since 2019 in my local markets.  So many capital owners are still playing rate-rise catch-up to all the others that were playing catchup.

Perhaps two birds with one stone could be gained – a regional banking collapse or run later this year or next could ironically strengthen the balance sheet of the United States and solve the inflation problem of asset prices.  It may even provide positive stimulus from the lower rates.  It’d be a gift to Gen Z.

When Silicon Valley Bank collapsed, 2-year and 10-year bond yields fell, as investors presumably fled to safety.  So if more regional banks collapse, a safe assumption would be lower yields again on Treasury Notes.  However, failing regional banks would cause a withdrawal of money out of the capital system, and thereby lower asset prices.  If it’s just financialization of capital assets being reformulated, and no fundamental net income issues from the assets, the labor components shouldn’t suffer to the same degree.

I think we should ratchet up the rates.