←back to thread

462 points JumpCrisscross | 3 comments | | HN request time: 0.42s | source
Show context
hopelite[dead post] ◴[] No.45078203[source]
[flagged]
1. Retric ◴[] No.45078232[source]
How do you come to that conclusion? It seems wildly inaccurate.
replies(2): >>45078389 #>>45078584 #
2. ◴[] No.45078389[source]
3. hopelite ◴[] No.45078584[source]
Because it's market/human psychology.

Reality is simply that industries are locking in tariff increase price expectations because they can (Wal Mart is even already increasing prices and the tariffs may not and have not yet even started impacting prices). It's just like how everyone started expecting a tip everywhere at all times at 25%, 35% rates during COVID and that not only has not disappear, it got even worse for a while before leveling off and the tip expectation is now north of 20% on average.

It's a common human behavior, a kind of ladder, the realization that "wow, I got away with all the previous increase rates, let's keep up the price increase rates since everyone has come to expect them".

Another example, car dealership premiums; they're still trying to push those and there is clearly a limited market and an unspoken agreement to keep them going across the dealerships. If people expect certain price increase rates, they have normalized those increases in their minds.

It's also why the fed has always "targeted 2% inflation" because it's a small amount that can be normalized over 12 months and you don't even notice it. But it's a steady rate that can be siphoned off the whole economy without people noticing the theft by fraud. You didn't complain about the fed stealing 2% of your wealth every single year, compounded all your life before they started stealing 5-12% for the last 5 years, did you? Sure, they can't get away with increased rates forever, lest the whole system collapse, but without someone/something forcing the hand, why should they stop. We are STILL hearing how the consumer is strong, while various revolving credit balances are increasing and people are just squandering future/other people's money, why would they care if they have to pay more, so why would sellers care not to increase prices if people are just willing and able to charge more.