2: On inflation and uncertainty
Onward, a Fundrise Production
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Is Inflation a Psychological Phenomenon?
When higher expectations for inflation are baked in, that can lead to actually higher inflation in the present because it's expected and so companies might start raising their prices. The Fed has to unwind what just happened over the last decade, plus so they have to basically start by tightening the monetary policy,. That should have the opposite of a wealth effect, right? People don't feel as wealthy. And that starts to like lower demand for goods and maybe also quell positive sentiment.
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