US personal consumption spending hits record high, says Stanford economist, Fed should hike rates by more than 9% – Economics Bitcoin News

On July 29, the US Bureau of Economic Analysis reported on America’s personal consumption expenditure (PCE) price index for the month of June, and the figure saw the biggest 12-month increase since 1982. On the same day, John Cochran, a senior fellow at the Stanford University Hoover Institution and professor of economics, said the Federal Reserve should raise rates above 9% to contain inflation.

PCE price index up 4.8 percent from a year ago

The US economy continues to look gloomy every time a new economic report or data is released to the general public. In mid-July, the Bureau of Labor Statistics Consumer Price Index (CPI) report good was published, and showed that June’s CPI data shows a record year-on-year peak of 9.1%. US Federal Reserve on July 27 Enhanced The federal funds rate is 75 basis points (bps) to help curb red-hot inflation.

Two days later, the Bureau of Economic Analysis (BEA) issued a closely watched Personal Consumption Expense Index Data Otherwise known as PCE. The PCE index rose 6.8% in June, the biggest 12-month jump it has recorded since January 1982.

“From the same month a year ago, the PCE price index for June increased by 6.8 percent,” the BEA report details. “The prices of goods increased by 10.4 per cent and the prices of services increased by 4.9 per cent. Food prices increased by 11.2 percent and energy prices by 43.5 percent. Excluding food and energy, the PCE price index rose by 4.8 per cent compared to a year ago,” the government entity’s record notes. The BEA plans to release results from the National Economic Accounts Annual Update on September 29.

Stanford University economics professor thinks a gold or bitcoin standard won’t work

On the same day, economist John Cochran Interview With Kitco’s Newsdesk and said the US central bank should raise interest rates to more than 9%. Cochrane further commented that a gold or bitcoin standard would not be able to control inflation. The economics professor at Stanford University said the “consensus view” was that the Fed should increase rates “substantially above” the 9% region.

“That means, with 9 percent inflation right now, economists are talking about bringing interest rates to 10, 11, or 12 percent. [prices] down,” commented Cochrane. “I think the Fed and the markets are relying on too much inflation, which is going to go away on its own without interest rates,” Stanford economist David Lynn, a Stanford economist, told KITCO News anchor David Lin.

Lin also asked Cochrane about the gold standard or the bitcoin standard used to control inflation. “Sorry, no,” replied the economist. “Under the gold standard, there was a lot of inflation and deflation. 10 or 20 percent fluctuations of inflation and deflation, but every inflation then corresponded to a deflation. I’m sorry, we’re not going back to gold.” Cochrane believes the Fed needs to implement tough fiscal policy to combat inflationary pressures.

As far as the bitcoin standard, Cochrane said it was a terrible idea and emphasized bitcoin (B T c) “useless. “It’s a terrible idea,” Cochrane said in her interview with Lin. “In the context of financial technology, bitcoin is an attempt to revive gold, something intrinsically worthless that people hold on to simply because it is scarce… is profoundly intense.” Cochrane concluded:

The best answer is that our governments should start running quiet fiscal and monetary policies and pay more attention to keeping inflation under check.

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What do you think of the latest PCE data and economist John Cochran’s opinion? Do you think better fiscal and monetary policies can help reduce US inflation? Let us know what you think about this topic in the comment section below.

Jamie Redmayne

Jamie Redmayne is the News Lead at Bitcoin.com News and a financial tech journalist based in Florida. Redmayne has been an active member of the cryptocurrency community since 2011. He has a passion for bitcoin, open-source code, and decentralized applications. Since September 2015, Redmayne has written over 5,700 articles for Bitcoin.com News about the disruptive protocol emerging today.




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