They believe it to be simply transitory inflation or base effect-driven inflation.

If everyone thought as they do, they would have no issue.

But people don't think as they do.

People are observing prices go up, and enough of these prices going up that there is fodder

for this inflation narrative.

The thing is, inflation is a self-fulfilling prophecy.

When people believe that inflation is going to increase

the price of goods next month, they buy what they can now. That new demand creates the pressure

that actually pushes the price to go up. And bingo-bango, transitory base effect inflation becomes

real inflation. Welcome back to The Breakdown with me, NLW.

It's a daily podcast on macro, Bitcoin, and the big-picture power shifts remaking our world.

The breakdown is sponsored by nexus.io and bitstamp and produced and distributed by CoinDesk.

What's going on, guys? It is Wednesday, June 16th, and today's episode is all about rumblings

of a shift in macro policy, specifically about what we might hear at this afternoon's

Federal Open Market Committee briefing and what people think it might mean. So let's briefly set the stage. You have to go back

to 1971, and no, I'm just kidding, at least for this episode. But in point of fact, let's go back to

the great financial crisis. In the wake of that turmoil, the Fed sets up a raft of new facilities to

better support the market. And by support, we know we really mean

not let markets fail. This includes reducing interest rates, quantitative easing, i.e. purchasing

bonds and other assets to get money into the system, etc. The next few years are rocky. On the one

hand, there is a sense from some corners that the Fed hasn't done enough, that

recovery was too sluggish.

...