Fed Chairman Powell Unravels Inflation Riddle

Today on That's Not What That Means, we discuss how presenting an ideologically-motivated simplistic alternative explanation for an effect without supporting evidence is not the same thing as unraveling a mystery, especially when the effect wasn't mysterious to start with, it's just that the accepted explanation was inconvenient from the perspective of justification of policy serving to reinforce the interests of the already rich.

That is, economists don't generally deny that increased competition via online shopping reduces consumer prices and that increasing penetration of such shopping reduces, to some extent, the rate of increase of those prices, i.e., inflation; OTOH, many of them have seen for a long time the actual low level of inflation compared to aggregate economic performance in the US as driven more by the fact that a historically large share of the returns of economic growth are being captured at the top of the income distribution, having little effect on consumer demand.

Fed's target is roughly where the 10-year average is, so it's easy to justify a neutral stance.

https://trends.axibase.com/491c2442/2/