By Lisa Beilfuss | 17 March 2021
BARRONS — Consumers are googling “inflation” more often than at any time since at least 2008, setting financial markets up for a volatile reaction to a Federal Reserve that is likely to sound unperturbed by the specter of rising prices.
Jim Reid of Deutsche Bank points out Wednesday that Google searches for “inflation” are spiking, hitting peak popularity since the tracking began 13 years ago. The last peak was in 2010-11, in the aftermath of the financial crisis when fiscal stimulus amounted to 10% of gross domestic product. America’s fiscal response to Covid-19 has been about 27% of GDP, economists say. That’s not to mention the extraordinary monetary policy response.
“Financial markets wait with bated breath for the [Federal Open Market Committee] denouement later today,” Reid says, referring to the 2 p.m. Eastern time release of the Fed’s updated policy statement and Summary of Economic Projections, to be followed by Fed Chairman Jerome Powell’s press conference. Reid says Powell will likely sound “sanguine” on inflation, regardless of anything else he says. […]