The Seesaw Trading in Stocks, Bonds, and Oil Continues

Sorry, inflation is hardly a big problem despite having been above the Fed's ridiculous 2% target these past five years

Key Takeaways

• Inflation in Historical Context: I keep hearing about how U.S. inflation is far too high. Yet, at a 3.5% headline inflation rate, it is spot on the post-WWII average. As for the core rate of inflation, at 2.6%, going back seven decades, it actually is over a full percentage point below the historical norm. Is this really a problem? The bond market and consensus of economists seem to believe so. When Paul Volcker, the legendary inflation dragon-slayer, left the Fed in August 1987, the inflation rate was 4.3%. When he resigned, he was widely viewed as having been an enormous success, and his legacy lives on to this very day.