With inflation surprisingly low, the Federal Reserve still raised interest rate this week. It has been almost a decade since the last rate hike. They must be confident that the U.S. economy is stronger than it looks. While on the topic of inflation,
In 1974, the economist Herbert Stein, then a top adviser to President Richard Nixon, called inflation “a Hydra-headed monster” that “came in various forms—sometimes led by wages, sometimes by prices, by foods, by oil; sometimes it was domestic and sometimes imported.”
Below is a chart of U.S. inflation since 1775. You will notice that we haven’t suffered a period of deflation since the Federal Reserve was created in 1913. The violent drop and rise in inflation and deflation is also gone.
