Americans are becoming more worried about inflation than ever following the Federal Reserve and the federal government's unprecedented response to the virus pandemic downturn by plowing trillions of dollars into the economy. As a result, prices of financial assets and items in the real economy have soared over the last year which a new survey reveals three-quarters of consumers are concerned about inflation.
With the Federal Reserve turning a blind eye to rapid price increases, consumers are finding it unavoidable to avoid higher prices at the gas pump or supermarket. A CivicScience survey of more than 2,600 respondents found that 77% were somewhat concerned about inflation.
Much of the inflation concerns were based on younger respondents. About 52% of respondents aged 18-24 were "very concerned" about inflation, 50% of the 25-34 aged respondents were "very concerned," and 48% of 35-54. Surprisingly, baby boomers aged +55 were only at 37%.
Meanwhile, Cleveland Fed President Charles Evans said some increase in inflation would be welcome. "Too low inflation is no good," he added.
But for the millions of working-poor Americans still collecting pandemic insurance checks, soaring prices have been much of a nuisance.
"Naturally, people who have had their hours or pay reduced as a result of the pandemic are the most sensitive to the idea of inflation and what it means for the general cost of living. If it's difficult to make ends meet now, imagine how difficult it could be once inflation sinks in," said CivicScience.
On a political basis, conservatives were overwhelmingly more concerned about inflation than any other political group.
The general public appears to be catching up to the Fed's game as monetary and fiscal stimulus results in the higher cost of living.
By one gauge, as we noted earlier this month, inflation fears are the highest this century. The spread between US five- and 10-year inflation breakevens is now the highest since the early 2000s.
Consumers' outlook for inflation over the longer term climbed to an almost six-year high.
Americans are panic searching "inflation."
The Fed and government's big experiment with massive stimulus is possibly overheating the economy and may continue to push inflation higher. The Fed continues to beat its drums that it has inflation under control and that today's episode of surging prices isn't the 1970s.
The worst thing that could happen now is a repeat of stagflation in the 1970s.