What most consumers get wrong about inflation

Inflation is the rate of change in prices, but most consumers just think about the sticker price of all manner of things, whether it is a salad, whether it is their home, whether it's the cost of childcare, whether it's a car. I mean, you can't go to a dealer now and be looking at anything that doesn't start with a four handle, it feels like in many cases. Average price of a new car in the US is 50 grand. So I think that that nominal sticker price, let's call it discontentment that we see with consumers is extremely disconnected, in my opinion, from the economic view of what inflation expectations are. And this concept, as you mentioned, of well-anchored inflation expectations, which is really what most economists and Fed officials are obsessed with. This idea that they do not wanna create an inflationary spiral, which is basically people would go out and spend as much money as possible today in fear of higher prices tomorrow, which would then push up prices today even faster than they were going to go up, so on and so forth. We can see how that plays out. But I think that like what we're really getting at here is the problem that whether it's the Fed, whether it's a company selling goods and services, whether it's a politician, whether it's an investor, there is like a nominal price sticker shock to everything it feels like people are consuming now that consumers have not shaken, are not going to shake, have no plans to shake. And I'm not a big like, oh, the economists in the ivory tower, Fed officials are out of touch kind of guy. That hasn't really been my position covering the Fed over these years. And I don't necessarily think they're going that direction now. I just know that the sticker price on too many things it feels like has gotten to a point where no one wants to hear about anchored inflation expectations. And I wonder if that's gonna be like cold comfort for Fed officials who ultimately are not able to push and pull the economy to the extent they believe monetary policy could or that monetary policy could or has in past cycles. Yeah, I mean, it's the feeling that matters. I wonder if on car stickers, we could have nominal and then real. Or just like, hey, don't worry about the $50,000 price tag. This is only up 3% from last year. So really it's kind of in line with inflation. Yeah, people are gonna love that. This could be a good time to buy but you know, that leads to two thoughts here because you got my brain going to different places is I think the self-directed investor underpins the value of understanding the yield curve and how that does affect everything that you borrow. And I did actually a series on my social media and I started with that. So it's hard to get interest and say, hey, you need to understand how the credit market works in the yield curve because it's going to affect everything that you borrow even if you don't believe in the system, quote unquote, or whatever that is. It affects you so very, very much. And I even saw it where there was this trend on social media about during COVID, it started of course with YOLO and things like that. But then this very, very conservative investor with high yield savings accounts. And then when we moved, the Fed started lowering interest rates because they affect the front end of the curve, high yield savings accounts kept moving down. And even almost every day, I feel like I open on threads. I see someone say, hey, where's a better high yield savings account? Mine keeps going down. And then I take the time to write a novel. I should really copy and paste something so I can put it in again to explain how those are variable and it's based on the front end of the curve and it has to do with supply and demand and how the treasury, where it's based off of government debt what the government pays for our debt is a baseline or what the government pays for their debt is a baseline for what we pay for our debt. And so you have to care about that. And the reason why I'm giving you this really long answer based on the car concept we're talking about is it's a great time to time when you make purchases if you know how the curve works, we could look at the five to six years that's usually tied to interest rates at least for borrowing on cars. So we could be more tactical when we're accessing funds instead of having fear drive us with inflation expectations, quote unquote or feeling like the cost of living like we call it overseas, the cost of living crisis. That's definitely more relatable that that is higher. And so I just think it's interesting if we could shed some light to the everyday consumer even if they don't invest in the stock market just to understand how rates work I think would make a huge difference.