Opinion | What if the economy is as normal as it’s going to get?

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The U.S. economy is as normal as it’s ever going to get. Jobs are plentiful and real incomes have grown faster for those at the bottom. Swing voters might still be disappointed and ready for a political change because they had experienced relief programs during the pandemic that mitigated the damage. However, inflation ate their savings as consumers effectively got into bidding wars for the limited supply of goods and services. People really hate inflation, even if their wages rise to offset it. The Federal Reserve's struggle to get inflation down to 2 percent is more normal than the decade preceding the pandemic. Aging societies and a mountain of pandemic debt will tempt governments to run big deficits, which can create inflationary pressure. Globalization has stalled due to protectionist politicians and geostrategic conflict. Maintaining price stability might take more aggressively hawkish monetary policy than it did a few years ago. The best protection against inflationary pressure is stronger central bank independence. It's hard to know exactly what will happen if such tradeoffs become more normal.

#Economy #Inflation #InterestRates #FederalReserve #CentralBank #Pandemic

https://www.washingtonpost.com/opinions/2024/04/03/inflation-interest-rates-normal-economy/