More so for the US, but also for Europe, any attempt to tame surging inflation is complicated by recent surges in illegal immigration. There are different factors that cause inflation, i.e. the rate of rise in overall price levels. Monetary factors are the main driver, as the unprecedent monetary stimulus provided by the central banks (e.g. the Federal Reserve and the ECB), resulted in a parabolic increase in money supply. However, there have been other factors that further exacerbated inflation. One of these has been the similarly unprecedented fiscal stimulus embarked by governments, to offset the economic consequences of their Covid related policies (e.g. lockdowns).
Central banks can begin to walk back their monetary stimulus, but despite all that is going on in the economy, the Federal Reserve and the ECB continue to maintain negative real interest rates, where interest rates are lower than the rate of inflation. However, even if real interest rates are raised enough to actually return to being positive, this will not be enough to slow inflation by itself.
The idea that raising interest rates will slow inflation is that higher interest rates should result in decreasing the demand for goods and services, which will be the marginal effect. However, for America, there is another factor which is not talked about in this conversation so far. The open border policy of the illegitimate Biden administration means that literally millions of illegal immigrants are entering the US. All of these people need some place to live, which means that there will be an inelastic demand for residences. This means that no matter how high interest rates go, the demand for a place to live will only increase which will continue to push rental prices higher. (Homelessness will continue to increase, as there will be a growing number of people who will be unable to afford the “luxury” of living in a fixed residence.) This also means that there will be an ongoing increase in demand for food, as there will be millions of more people that will need to be fed. People are crossing the border into America, for hopes of a better life. Life is extremely hard in many places in the world — like Haiti and Venezuela. As these economic migrants move to America, their consumption of goods will undergo a major boost, which will make them better off. However, as their total consumption increases, the overall demand for wheat, corn, milk, meat, etc. will increase. Even if the Federal Reserve increases the over night Fed funds rate to 5% (it is currently below 1%), the demand for housing and food and energy will only increase further as millions more illegal immigrants flood across the open southern border of America (and the same phenomena is at work in Europe). The illegitimate Biden administration will continue to give complete financial support to theses economic migrants, which translates into ever larger budget deficits — which will only further exacerbate surging inflation.
The Federal Reserve made the unsupported assertion that surging inflation was transitory, and they were proved wrong by the data. However, more worrisome was their utter lack of economic thinking by claiming that rising inflation was due to “supply bottle necks”. Now, Wall Street is arguing that inflation is peaking and that it will go down, however slowly. However, there is nobody on Wall Street publicly talking about the consequences of the open southern border in America (and in Europe as well). Blackstone is must be aware of the economic implications of the open border, as they are accumulating massive amounts of residential property across America.
The inflation problem in America and Europe will continue, as the Whore and the Beast, the ruling powers behind the politicians, are only concerned with their own agendas — which have nothing to do with the welfare of their citizens. America has plunged a quarter of the world into war and chaos, creating the dominion of Death and Hades, and now the Whore is looking to do the same to Europe. Soon enough, the Beast will wake up to the intentions of the Whore, and things will really start getting nasty.
The world is filled with the signs of Revelation.