Who can fix inflation? 💸
  Tonight: The one simple trick to solve inflation that no one's talking about... Let's get into it. 💸 HOW TO FIX INFLATION  Here's a headline we're seeing a lot these days: Key inflation gauge hits yet another record. A day after the consumer price index hit a 39-year high, another barometer of inflation strolled in to bum us all out with a record high. It's the producer price index, which tracks wholesale prices, and it's at 9.7%. All right, all right. Inflation is rough right now, we can all agree. So what do we do? How do we fix it?
The short answer: Wait.
I know, it sucks, but here's the deal: Much the way the cause of inflation doesn't lie with any single government action or lack of action, fixing it is well beyond the scope of any one lawmaker, central bank or economist.
A lot of the more painful price surges are the result of global market forces — higher energy prices (blame OPEC) or global supply chain problems (blame Covid…and the breakneck globalization of the past 40 years that left manufacturers reliant on a massive, perilous web of highly specialized and concentrated industrial players in the name of consumerism. Capitalism, bebe!)
And then there's the blame we all share: We like buying stuff. Like, a lot. The only way to force prices down right now — apart from magically solving both Covid and the supply chain crisis — would be to plunge the economy into a recession, Volcker-style, or if an act of God forces more shutdowns. Either option would result in massive job losses, and no one wants that.
"Give people the choice between losing their jobs or paying more at the pump, people will take higher gas prices," said Mark Zandi, chief economist with Moody's Analytics. "You could kill the economy to get demand down, but you end up with a dead economy. It doesn't make much sense."
Can the government do something? Not really. Biden is doing what he can, but his options are pretty limited. "There are things on the margin, releasing oil from the petroleum reserve, jawboning meat packers on prices," Zandi says. "But they won't have much impact on inflation."
When will it be over? Lord, wouldn't we love to know. Some economists say inflation is likely peaking right about now, but it'll still take time to get down to pre-pandemic levels.
What's the Fed doing? Jay Powell, certified Beltway Babe, has a dual mandate to promote both employment and price stability. But the central bank can't exactly flip a switch to right the global economy. It is using the tools it has to tame prices — namely, rolling back its pandemic-era emergency stimulus measures and signaling it plans to raise interest rates to limit the amount of money coursing through the economy. Raising interest rates should cool prices, but, again, it'll take some time.
How is Covid going to screw us this time? Hard to say! Anything could happen. Let's toss it back to Zandi: "The only solution to inflation pressures is getting the pandemic under control," he said.
So, you know, get vaccinated and boosted. #️⃣ NUMBER OF THE DAY 3.45% In the second big jump of 2022, mortgage rates again rose to a high not seen since the start of the pandemic. The 30-year fixed-rate mortgage averaged 3.45% last week, up from an average 3.22% the week before, according to Freddie Mac.
Once again, it's a good news-bad news moment: Rates are going up because the overall economy is stronger. But housing inventories remain near record lows, which will keep prices elevated and nudge some buyers out of the market.
💼 NO GOING BACK  Another day, another Covid variant delaying Corporate America's long awaited return to the office.
Just this week, Facebook delayed its return (again). So did Goldman Sachs (again!). Uber, Lyft, Ford and Google have all changed their plans in light of Omicron. Many businesses have simply stopped trying to predict when the big Return to Office will happen.
When are we going back? That's been a constant question with a constantly changing answer, echoed in countless virtual meetings across industries.
Here's my humble suggestion to managers anywhere who're grappling with this question: Never.
MY TWO CENTS When I walked away from my desk at CNN on March 11, 2020, I left behind a laptop, a blazer, a rain jacket, my most rugged winter boots, a smattering of shoes I reserved for the office, a pair of fingerless gloves I wore while typing beneath the overzealous air conditioning vent, a French press, a shirt I ordered online and had every intention of returning, and probably 50 of those little assorted packets of salt and pepper that I never needed but refused to throw out.
Like most people, I never expected to be gone long. Instead it's been nearly two years in which I've changed jobs twice – my new desk isn't even on the same floor.
Don't get me wrong, I want to see co-workers in real life again. But we need to dispense with the notion of "going back." The pandemic has given us a chance to evolve, to take stock of everything that was broken about work before and fix it. Like, commuting two hours a day, five days a week. That's 10 hours a week on a crowded subway car… all because we'd never thought to demand something different.
So much of our work life is built around traditions we've rarely, if ever, questioned. Why is a 40-hour week, spread over five days (a work model as old as the Model T), still the standard a full century after it was adopted? Why are we no closer to the Keynesian prediction of a 15-hour work week by the year 2030?
The answer is inertia.
The pandemic forced us into a great big mass experiment, one we never would have tried otherwise. It was far from ideal, but look at how the great world continues to spin as I type this from an apartment in Brooklyn rather than from my cubicle in Manhattan.
My suggestion is not that we stay isolated at home forever – far from it. But trying to turn back the clock and get everyone back to a Before Times routine, like nothing ever happened, is a bit of putting toothpaste back in the tube. Countless executives are on record talking about the "culture" that's missing, though few have offered a more specific vision of what that culture is, or how it could be better.
All I'm saying is, before we all rush back and slip on those office shoes again, maybe it's worth rethinking what the office should be. It's been two years – what's a few months more?
WHAT ELSE IS GOING ON? 💉 The US Supreme Court blocked President Joe Biden's vaccine and testing requirement aimed at large businesses, but it allowed a vaccine mandate for certain health care workers to go into effect nationwide.
🚫 About 8,000 grocery store workers at 77 King Soopers and City Markets stores in the Denver area are on strike after the union rejected what the company described as its best and final offer to replace a recently expired contract.
⚖️ Kim Kardashian and Floyd Mayweather Jr. are being sued for allegedly misleading investors in their promotion of a cryptocurrency token.
🚀 Shares of Virgin Galactic — the space tourism company that carried its billionaire founder, Richard Branson, to the edge of space — tumbled on Thursday after the company announced it is raising as much as half a billion dollars in debt. TWEET OF THE DAY 
 CNN BUSINESS NIGHTCAP You are receiving this newsletter because you're subscribed to CNN Business Nightcap.
No longer want to receive this newsletter? Unsubscribe. Interested in more? See all of our newsletters.
Create CNN Account | Listen to CNN Audio | Download the CNN App
® © 2022 Cable News Network, Inc. A WarnerMedia Company. All Rights Reserved. One CNN Center Atlanta, GA 30303
| ||||||||||||||||||||||
