Inflation - ELI5, How Do We Get These CPI Numbers
I like to think I'm a smart guy, but I can't grasp the
- Why are prices going up so much? People are saying it's because there's less of a supply chain (lower supply of say food), coming out of covid there's higher demand (how, it's the same people wanting the same goods). I can somewhat see it but still don't fully get it.
- Why are prices going up by so much? Seems to be phantom demand for food energy. I assume the cost of say food is looked at across grocery stores in real time price of milk last month vs now. Also it seems these costs have been fluctuating around 7.7-8.3% monthly but I'm assuming these are annual costs? What does this % actually mean?
So the solution by the government is what? Throw money at it, give subsidizes to offset these costs. Are the debt markets playing a factor bc higher interests/borrowing costs = higher costs across the board.
How will higher rates slow the economy/inflation? So less debt available = less money to spend I guess? So that brings down prices because less people are buying is that it? We're still seeing strong job growth, people still have a need for necessities - How will all of this throw us into a recession if fed doesn't get these rate hikes right?