Animal Spirits Podcast Boomflation or a Recession? (EP.244)
Feb 16, 2022
This discussion dives into the latest inflation trends and the Fed's tough choices amidst rising interest rates. The hosts highlight the strong positioning of corporations like Disney, showcasing their impressive revenue growth. There's a notable focus on the SEC's recent fine against BlockFi, sparking a conversation about crypto regulation and investor protection. Personal anecdotes about family investments, NFTs, and dining experiences bring a relatable touch to the economic landscape, while the nostalgic trips to Disney remind us of the joy in leisure amidst financial concerns.
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Inflation vs. Interest Rates
- Interest rates and inflation historically moved together.
- Now, inflation outpaces rates significantly, a unique situation.
Boomflation vs. Recession
- The Fed faces a dilemma: control inflation with recession risk or accept higher inflation with growth.
- "Boomflation", with higher growth and wages, might be preferable to recession.
Consumer Resilience
- Despite high inflation, consumer spending remains strong.
- Household balance sheets are robust, enabling them to absorb price increases.