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03/09/2022

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Hi Professor,

While I am with you on the thought that this inflation is not permanent, I feel Covid was one of the major forces behind the increased workers' bargaining power, given that the shortages. With low unemployment rates, companies are struggling to find workers for low wages.

https://www.cnbc.com/2022/03/10/theres-more-inflation-coming-as-the-federal-reserve-starts-raising-interest-rate.html

Seems as if the fed is raising interest rates while keeping an eye on the markets. It'll be interesting how the transparency Powell is showing will affect exchanges and the predictability will keep the markets going even as rates increase.

How high would interest rates need to go to tame inflation? I've read that the current hikes are insufficient to deal with it. I came across this article about about stagflation being possible: https://www.forbes.com/sites/sergeiklebnikov/2022/03/15/most-wall-street-experts-now-predict-stagflation-heres-what-that-means-for-investors-and-the-us-economy/?sh=58d48ebc1400

I've read about the US in the 70s and its experience with stagflation. Is this a serious risk?

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