inflation going to disappear? the central bankers really know what matters is what happens 18 months from now or so. a hurricane comes, everything is disruptive for a while, things turned back to normal in a few months of the question is, is there another hurricane that hits next year? this is waiting and watching, being very concerned that prices have risen, but the fed is still putting stimulus in there and store it all happens if it actually was to start to raise rates as the bank of england is. this to raise rates as the bank of england is to raise rates as the bank of england is. to raise rates as the bank of enclandis. a ,~ england is. as you say, they are still putting england is. as you say, they are still putting the england is. as you say, they are still putting the stimulus - england is. as you say, they are still putting the stimulus in. - england is. as you say, they are l still putting the stimulus in. they flooded the us economy with cheap money to stop the recessio
the big issue is banks don t know the answer, is this temporary? will this fade away later in the year? the fed suggest inflation will be about 2.2% in about a year s time and that is pretty much what the bank of england things, but in a sense they are guessing because they d never seen anything like this, an obvious that people are hurting. this, an obvious that people are hurtinu. . this, an obvious that people are hurtin. ., ., ., “ this, an obvious that people are hurtinu. ., ., hurting. that i m looking at the november hurting. that i m looking at the november production - hurting. that i m looking at the november production prices . hurting. that i m looking at the november production prices in | november production prices in america, theyjumped nearly from last year. the biggestjump we have ever seen on record. that is the cost of production. why would you look at those figures and think, oh, yeah, the cost for the consumers going to come down? the yeah, the cost for
because if they put interest rates up next year, we are all going to be paying more for the mortgages and the credit card balances then we have. do they need to just be a bit careful about putting interest rates up careful about putting interest rates up now, when we don t know where this third wave is going? rgreat this third wave is going? great question- this third wave is going? great question. yes, this third wave is going? great question. yes, absolutely. - this third wave is going? great j question. yes, absolutely. the reason they are very worried about it, ithink reason they are very worried about it, i thinkjay powell that to say, we without knowing the course of the virus. with delta last spring, that emerged and caused the economy problems, so with the emergence of this new virus, the problem is activity starts to slow. if the central bank raises rates because it is worry about inflation, but it will do is create unemployment, making it harderfor will do is create unemp
states, so we re gonna look at food, energy, fuel and transport, and you can seejust energy, fuel and transport, and you can see just how dramatic it has been energy up 33%, fuel, 58%, used vehicles pushing up inflation as well so with all that in mind, perhaps there is no certainty that is one more affect our lives day to day. do you think the feds decision could have an impact? the day. do you think the fed s decision could have an impact? could have an impact? the fed decision was could have an impact? the fed decision was priced could have an impact? the fed decision was priced in, - could have an impact? the fed decision was priced in, it - could have an impact? the fed decision was priced in, it was l could have an impact? the fed l decision was priced in, it was not different from what the orchids were expecting, but i think the answer is it is really sort of unclear what is going to come, and jerome powell made that plain in the press conference of the issue is, this has
securities. if the economy evolves broadly as expected, similar reductions will likely be appropriate each month, implying that increases in our securities holdings would cease by mid march, a few months sooner than we anticipated in early november. we will come back to what that all means and why the bank is easing off on its support in a second. but let s quickly focus on the uk, because it is a similar picture here the cost of living has risen at its fastest rate in a decade, with inflation reaching 5.1% last month, those figures just revised upwards. the office for national statistics says rising transport and energy costs are largely to blame. so the question is, does today s fed announcement guide the other central banks around the world? and if so, is it going to affect you and me? let s bring in former bank of england member david blanchflower, who is now a professor of economics at dartmouth college in new hampshire. very good to have you with us this evening. let mejust ver