Nominal News

PhD Economist at Nominal News. Application of economic research to real issues.
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I promise you that if you read this primer on inflation, you will know more about inflation than 99% of pundits and podcast hosts - https://t.co/518RB35hyb

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Given the wide breadth of perspectives on what Kevin Warsh meant about interest policy, Fed communication is already worse.

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I think people are significantly misjudging how bad the ‘taskforces’ announced by Kevin Warsh will be.

It's undermining the work of all economics.

It's like having a ‘taskforce’ for child vaccine schedules.

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@Colin_d_m @AsadFromNYC It still doesn't address the issue that increasing fares increases all other social costs (pollution, congestion, reduces economic activity). A simple increase in road fees is much better.

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@Colin_d_m @AsadFromNYC Why would we want to discourage subway use though? It's a net negative to the wider NYC area.

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Oof - we have slower growth and high inflation currently. Also, Q1 GDP, even at 1.6% is ‘artificially’ inflated due to the fact that in Q4 2025, there was a government shut down.

Adjusting for this, GDP growth was around 1.2%.

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PPI (Producer Price Index - the prices producers receive) increased by 1.3% month over month (not annualized). On a last 12 month basis - this is 6%.

Honestly, I'm starting to lean that a rate hike this year should be in order. The risk of inflation unanchoring is increasing.

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In summary - tariffs + immigration crack-down + war = elevated inflation for probably at least 12 months. Calls for interest hikes will rise.
5/5

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Inflation in the US came in very hot, with core (i.e not including food and energy) at 2.8 percent.

Two comments:

1/5

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Goods inflation does spill-over into services, which is why inflation will be a bit bigger than just inflation in goods. We are seeing this now with services running at 3.3% inflation. When you remove shelter from this measure - inflation is even worse.
4/5

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https://t.co/5ENFSBJFZV

2/2

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We can now more comfortably evaluate the impact of tariffs on the US economy, and, unfortunately, as economists had predicted they’re not good:
- Prices are up possibly by more than just the tariff;
- Inflation is up;
- Wages are lower;
- Consumers are significantly worse off
1/2

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@arpitrage https://t.co/sNRutgONyM

https://t.co/itXv4HA31w - why HOAs might be needed.

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@arpitrage I covered the research on this angle in one of my articles - links to post and papers below

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@AnechoicMedia_ Not exactly - research shows that the new lane is used by locals that take more car trips. Immigration into an area doesn't explain much of the increased car usage.

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Unemployment Rate in April stayed at 4.3%

Number of added jobs in April: +115,000.

The US Economy keeps ticking along. I wonder if the recent positive change is driven by the tariffs being voided. Also, with inflation being higher, interest rate cuts should be off the table.

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@JustinWolfers Do you though? A country like the US, the debt is predominantly held by US citizens. To repay the debt you need to raise taxes - ultimately on many of the same debt holders. Or just haircut bond holders which is similar to raising taxes on bond holders.

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Powell stated that tariff inflation will disappear in inflation readings in the next two quarters.

Personally, I think the tariff inflation shock will dissipate at the end of 2026 (assuming no new tariffs and an expiry of all tariffs). A slightly later timeline according to me.