Fun

US Personal Consumption Expenditures Tap Record Highs, Stanford Economist Says Fed Should Increase Rates Above 9%

News Feed - 2022-08-01 01:08:13

US Personal Consumption Expenditures Tap Record Highs, Stanford Economist Says Fed Should Increase Rates Above 9%


On July 29, the U.S. Bureau of Economic Analysis reported on America’s personal consumption expenditures (PCE) price index for the month of June, and the figure saw the largest 12-month increase since 1982. On the same day, Stanford University’s senior fellow at the Hoover Institution and professor of economics, John Cochrane, said the Federal Reserve should increase rates above 9% to tame inflation. PCE Price Index Increased 4.8 Percent From One Year Ago


The U.S. economy continues to look gloomy every time a new economic report or data is released to the general public. In mid-July, the Bureau of Labor Statistics Consumer Price Index (CPI) report was published, and it revealed June’s CPI data reflected a record peak 9.1% year-over-year increase. On July 27, the U.S. Federal Reserve hiked the federal funds rate by 75 basis points (bps) in order to help curb the red hot inflation.


Two days later, the Bureau of Economic Analysis (BEA) released the closely watched personal consumption expenditures index data otherwise known as PCE. The PCE index saw the largest 12-month jump rising 6.8% in June, an increase that hasn’t been recorded since January 1982.


“From the same month one year ago, the PCE price index for June increased 6.8 percent,” the BEA report details. “Prices for goods increased 10.4 percent and prices for services increased 4.9 percent. Food prices increased 11.2 percent and energy prices increased 43.5 percent. Excluding food and energy, the PCE price index increased 4.8 percent from one year ago,” the government entity’s records note. The BEA plans to release results from the National Economic Accounts annual update on September 29. Professor of Economics at Stanford University Thinks a Gold or Bitcoin Standard Won’t Work


On the same day, the economist John Cochrane did an interview with Kitco’s newsdesk and said the U.S. central bank should bump interest rates higher than 9%. Cochrane further remarked that a gold or bitcoin standard would not be able to control inflation. The professor of economics at Stanford University said that the “consensus view” was that the Fed should hike rates “substantially above” the 9% region.


“That means, right now with 9 percent inflation, economists are talking about 10, 11, or 12 percent interest rates to bring [prices] down,” Cochrane remarked. “I think the Fed and markets are counting on a lot of inflation going away on its own without interest rates having to go quite that high,” the Stanford economist told Kitco News anchor David Lin.


Lin also asked Cochrane about a gold standard or a bitcoin standard used to control inflation. “Sorry, no,” the economist replied. “Under the gold standard, there was a lot of inflation and deflation. 10 or 20 percent ups and downs of inflation and deflation, but every inflation was then matched by a deflation. I’m sorry, we’re not going back to gold.” Cochrane believes the Fed needs to implement tighter fiscal policy in order to combat inflationary pressures.


As far as a bitcoin standard, Cochrane said it was an awful idea and insisted bitcoin (BTC) is “worthless.” “That’s a terrible idea,” Cochrane said in his interview with Lin. “In terms of financial technology, Bitcoin is an attempt to revive gold, something intrinsically worthless that people only hold onto because it’s rare… Bitcoin is also very poor for making transactions itself, since it’s so computationally intensive.” Cochrane concluded: The best answer is our governments should start running sober fiscal and monetary policies, and pay more attention to keep inflation under control. Tags in this story BEA, Bitcoin, Bitcoin (BTC), bitcoin standard, Bureau of Economic Analysis (BEA), Core PCE, David Lin, Economist, gold, Gold Standard, inflation, January 1982, John Cochrane, Kitco News video, PCE, PCE data, PCE price index, personal consumption expenditures, US Inflation


What do you think about the latest PCE data and the economist John Cochrane’s opinion? Do you think improved fiscal and monetary policies can help tame U.S. inflation? Let us know what you think about this subject in the comments section below. Jamie Redman


Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today. Renowned Investor Jim Rogers Warns "the Worst" Bear Market in His Lifetime Is Incoming ECONOMICS | 22 hours ago Nigerian Currency Plunges to New All Time Low — Central Bank Blames Speculators ECONOMICS | 2 days ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleWhile the Bear Market’s Claws Drag ETH Prices Down, Ethereum Network Fees Remain Low Next articleSurvey That Asks if The Merge Could Cause an Ethereum Chain Split Sparks PoS Delay Discussions Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItCentral Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year


The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this ... read more.NFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Goldman Predicts US Recession Odds at 35% in 2 Years, John Mauldin Wouldn"t Be Surprised if Stocks Fell 40% Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto

News Feed

Vow Introduces the Next Step in the Evolution of Crypto-Based Currencies
Vow Introduces the Next Step in the Evolution of Crypto-Based Currencies sponsored Since the beginning of 2021, the cryptocurrency industry has experienced a mark
Aave deploys DeFi protocol on BNB Chain
Ezra Reguerra10 hours agoAave deploys DeFi protocol on BNB ChainThe BNB Chain team said that Aave’s deployment on the network provides their community access to increased liquidity and new lending and borrowing options
Ezra Reguerra11 hours agoSmart contracts continue to rise amid market downturn: BNB Chain Q2 reportBNB Chain noted that the rise in verified smart contracts highlights the demand for security, reliability and scalability
Citi Predicts Metaverse Could Be $13 Trillion Opportunity With 5 Billion Users
Citi Predicts Metaverse Could Be $13 Trillion Opportunity With 5 Billion Users Citi has predicted that the total market for the metaverse economy could grow to between $8 trillion
MicroStrategy a ‘timely play’ on Bitcoin halving, $990 target price: Benchmark
Tom Mitchelhill7 hours agoMicroStrategy a ‘timely play’ on Bitcoin halving, $990 target price: BenchmarkMicroStrategy’s Bitcoin holdings have passed $11 billion, and its shares could gain from increased institution
Crypto.com gets green light to trade in Dubai
Savannah Fortis13 hours agoCrypto.com gets green light to trade in DubaiCrypto.com’s Dubai-based entity received full operational approval from Dubai’s virtual asset regulator, becoming the first exchange in the UAE
Crypto Miners in Russia’s Irkutsk Region Fined Almost $1.7 Million This Year
Crypto Miners in Russia’s Irkutsk Region Fined Almost $1.7 Million This Year Authorities in the energy-rich Russian region of Irkutsk have imposed hefty fines on crypto miners th
MeWe social network boss says blockchain can solve the TikTok problem
Tristan Greene4 hours agoMeWe social network boss says blockchain can solve the TikTok problemCEO Jeffrey Edell laid out a six-point plan for social media companies planning the transition to blockchain.392 Total views3
Video Game Retail Giant Gamestop Reveals More Clues About Upcoming NFT Marketplace
Video Game Retail Giant Gamestop Reveals More Clues About Upcoming NFT Marketplace At the end of May, crypto advocates discovered a website created by the video game retailer Games
Savannah Fortis14 hours agoGoogle Cloud to digitize El Salvador’s governance, healthcare and educationGoogle Cloud and the government of El Salvador have entered into a seven-year partnership to digitize the country’
Dow Recoils After Trump Trade Guru Dangles 100% Tariff Threat
The Dow"s dramatic reversal sputtered on Thursday, as the post-Fed rally ran out of steam amid a burgeoning crisis in the Middle East and warnings that China tariffs could go as high as 100%.
Debate shifts negative as Solana memecoin trading volume dips
Tom Mitchelhill5 hours agoDebate shifts negative as Solana memecoin trading volume dipsA Messari data engineer has called it the “most extractive crypto phenomenon” since the ICO boom, but the jury"s still out on tha