INFLATION EXPLAINED - From Consumer Price Index, the Federal Reserve, to monetary and fiscal policy

Inflation is a rise in prices of a selection of products and services. Commonly expressed as a percentage, it also refers to the decline in the purchasing power over time. Inflation could lead to a decline in economic growth and ultimately an economic contraction or a recession.

The Consumer Price Index - or CPI - is the most widely used measure of inflation.
Financial markets, government policymakers, businesses, and consumers watch the CPI very closely. The Federal Reserve closely monitors the CPI to adjust monetary policy and implement appropriate measures to control the money supply and credit. The Fed may use the discount rate, purchases or sales of US Treasuries to control money in circulation.
The Producer Price Index - or the PPI - measures prices at the producer level. Producer prices greatly influence prices charged at the consumer level.

This video explains the causes of inflation from government money printing, stimulus checks, tax rebates and other causes and the terminology used (DEMAND PULL Inflation , COST PUSH Inflation, and BUILT IN Inflation).

Wars, natural disasters and weather events may cause inflation by limiting supplies. Sound monetary policy and fiscal policy can help reduce inflation.

#inflation #cpi #purchasingpower #currency #monetarypolicy #credit #business #commodities #consumer #economy #employment #interestrates #recession #demand #cost #money #federalreserve #thefed #ppi #producer #moneyprinting #moneysupply #stimuluscheck #hyperinflation #prices #risingprices #inflation2022