by Wolf Richter
“It is of paramount importance to get inflation down,” she said to get markets to prepare for what’s coming. And they’re preparing.
Fed Governor Lael Brainard, one of the biggest doves on the Fed’s monetary policy committee, explained this morning in detail that inflation is hitting lower-income households much worse than higher-income households, and that it is hitting disadvantaged households, such as those with limited access to online shopping, even harder, and their inflation rates are far higher than the national average inflation rates because the basket of goods they’re buying is systematically different, and that they’re spending nearly all their money on necessities, and that they often cannot substitute items whose prices have jumped with lower-cost items, because they’re already buying the lowest-cost items to begin with, and there is no way to go lower on the ladder. They can only buy less, such as buying less of the cheapest store-brand cereal, which is the example she used.