Why is this inevitable?
Investment in US tight oil is stagnating, OPEC+ lacks either the desire or capability to increase production, Venezuela's production capacity is still terrible, and rumors are getting quite loud that Ghawar has finally peaked.
EV sales are still far less than 50% of total sales, so net global fuel demand will continue to increase in the face of tight supply.
Barring another severe COVID variant outbreak, I don't see fuel prices declining anytime soon.
And the cool thing about energy prices is they feed forward into the cost of literally everything else in future PPI/CPI prints.
But the biggest factor is that the cost of renewable electricity is dropping fast. And to many industries, they are imperfect substites, so the price of electricity and gas are correlated.
> And the cool thing about energy prices is they feed forward into the cost of literally everything else in future PPI/CPI prints.
Exactly, which is why the forthcoming massive drop in electricity costs has me so excited.
That's not “the preferred term” for what you are responding to (whether it is transitory), but an orthogonal concern.
Yes, they would have preferred using a term that would make them look less foolish.
The political machinations you're touching on are a really disgusting reality of our system. People would love to sacrifice the middle and lower class for the sake of having their party in power.
https://thehill.com/blogs/in-the-know/in-the-know/456942-bil...
Edit since I'm getting downvoted, this did happen, and it's gross to see, regardless of what political side you support. I don't want a recession to happen even if my preferred party isn't in power. The people at the bottom are the biggest losers when recessions happen, even if most of the users on this board are largely insulated from the fallout.
The next question is whether this is a one time bump or systemic? 10% inflation once is one thing, 10% inflation continuously is a completely different thing.
It's very important to get this right, because the only real antidote to inflation is recession. Raising interest rates and raising taxes will stop inflation, but kill the economy. Recession is preferable to stagflation, but nothing else.
And remember there are two sides to the political machinations at work here. A good recession will guarantee that the Republicans take the White House in 2024.