 Hello, I'm Mark Thornton, and this is Minor Issues, number 10, a mini podcast from the Mises Institute. Well, the disinflation story that the Fed and Wall Street have been talking about and telling us about for so many months now about disinflation, or a gentle falling rate of price inflation has really gone out the window this week in a big surprise to the people at the Fed and the people on Wall Street that this story has not really held up and that the American people are facing a lot of economic pain. The inflation story was a surprise in that the PCE price index was up much higher than expected and the PCE price index excludes food, it excludes energy, and it excludes the price of services. And those three categories are where inflation is actually higher than the prices of other goods. So the PCE actually underestimates the impact of the Fed's inflation on the American people. So inflation is up. And also we're getting word that job openings are falling. We've had historic high numbers of job openings for the last few years. But private companies, matching workers with companies, indicate the job postings on their web pages are down significantly. So that's a negative story about the labor market which had been so very hot. Now we anticipated both of these developments so it's no surprise here but let's see what it does to the Fed mindset. Well with inflation running hot much higher than expected that would typically tell the Fed to raise rates higher. You know they anticipated going up to five percent. That story looks like it's out the window and with job opening postings down significantly that would say to lower interest rates or at least keep them the same. So the two main policy goals that the Fed talks about are going in the wrong directions and going in the opposite directions in terms of their policy. Which way will they go next is the question. As far as regular people are concerned they're suffering from inflation. Dominoes recently noted that their sales failed to meet forecasts because their customers are choosing to eat in. And of course I've eaten a thousand Dominoes pizza and all of them have been eaten in but what they're really talking about in the press is that people are not picking up a pizza Dominoes for eight or ten dollars but they're buying food at the grocery store and fixing it themselves and eating less. So those are the adjustments and substitutions that we are taking to keep our own inflation rate lower but it's very painful. And in terms of savings, the savings are the things that protect us against bad things happening in the economy well the interest rates that we can earn on our savings are still far below the inflation rate so the Fed policy is making saving for these type of contingencies more and more difficult and savings are being used up rather than accumulating for bad times. So the minor issue today these reports that don't get much play in the mainstream press is that things are with respect to the Fed's disinflation narrative it's gone awry and it means more pain for people out there in the real economy.