What Policy Targets? Why The Fed Can’t Hit The Broad Side Of A Barn

One of the great scandals of the present era that will surely flummox future historians is how central bankers got away with the absolute stupidity embedded in their policies and narratives for so long. The latest iteration of that, of course, is the “inflation is transitory” canard, which took it on the chin again this morning with release of the Case-Schiller housing index.

In word, the latest national housing index reading set an all time record, rising by 14.6% in April versus prior year. That actually beat the previous 14.4% high of April 2005, with respect to which the chart below reminds us as to exactly what happened next. To wit, 5-years later the index was 20% lower.

Case-Shiller National Housing Price Index, 1988-2021

Well, no, the “base effects” excuse doesn’t cut the mustard, either. Not even remotely. During the last nine months the per annum rate of national house price inflation has doubled on a two year stacked basis.



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