In the big oil shocks that really damaged the economy, the tax on the consumer was many times more than that, but that alone wasn't enough. You also had to have people worrying that prices were going higher forever.
More Quotes from Ethan Harris:
With inflation trending up, we believe the Fed will want to stay on the tight side of neutral for an extended period.Ethan Harris
If you're doing budget planning in business, you budget for the downside risks, not for the most optimistic scenario. But the federal government doesn't have to worry too much -- it's the only business that has a blank check.
Ethan Harris
The markets are going to be a bit uncertain as to how to react, given that the Fed is waiting in the wings, ... They are all going to be looking ahead toward the FOMC meeting to see what the Fed's verdict is on the data rather than reacting as it comes out. They'll be sort of holding their breath.
Ethan Harris
There's definitely going to be nervousness around the event and a kind of inertia. My wife has already asked me not to come into work that day.
Ethan Harris
Ultimately, for the economic recovery to sustain itself, we have to see the labor market improve. As the tax-cut benefits fade, consumers will look for more fundamental reasons to spend money, and there will have to be some job growth.
Ethan Harris
I think that (high inflation readings) would be almost the last straw to convince the Fed.
Ethan Harris
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