Fed funds rate - CPI = real rate
Using current numbers: 4.75% - 6.4% = -1.65%
Put your money in a savings account with a 4.75% APY, you're still losing to inflation at a rate of 1.65%.
If real rates aren't positive, then central banks frankly aren't even trying to bring inflation down. Despite the """""aggressive""""" rate hikes from the Fed, bonds are still dogshit and people are still borrowing money to buy things while they're still cheap before inflation jacks up the price, which only perpetuates more inflation.
Also realize they routinely rejigger the CPI formula so the government doesn't look bad. The calculation above was using "official" numbers; the real inflation numbers are worse, easily double the CPlie.
Welcome to the American Lost Decade. Real rates are still negative, despite the Bureau of Labor Statistics cooking the CPI.
And the media carrying the water.
Could you elaborate on what you mean by this?
Fed funds rate - CPI = real rate
Using current numbers: 4.75% - 6.4% = -1.65%
Put your money in a savings account with a 4.75% APY, you're still losing to inflation at a rate of 1.65%.
If real rates aren't positive, then central banks frankly aren't even trying to bring inflation down. Despite the """""aggressive""""" rate hikes from the Fed, bonds are still dogshit and people are still borrowing money to buy things while they're still cheap before inflation jacks up the price, which only perpetuates more inflation.
Also realize they routinely rejigger the CPI formula so the government doesn't look bad. The calculation above was using "official" numbers; the real inflation numbers are worse, easily double the CPlie.