The author says new Fed chair Kevin Warsh has pledged to hit the 2% inflation target soon, but core PCE was still 3.7% year over year in July—the 65th straight month above target.

Using a Rothbard–Salerno “true” money-supply measure, the piece reports July growth of 8.62% year over year (M2 up 5.42%), with the money stock much larger than before 2009 and 2020.

That growth, it argues, is Fed-driven (rate cuts and more Treasury buying) despite weak GDP, falling employment, and real wages lagging inflation—and is what allows a general rise in prices, not just isolated shocks.

Shortly after becoming the new Fed chairman, Kevin Warsh has admitted that it’s been more than five years since the Federal Reserve hit its two-percent price-inflation target. Warsh has also claimed that he’ll change that, and he’ll bring down price inflation very soon. But if Warsh is serious about price inflation he’s going to have to make some pretty substantial changes. After all, the Fed’s preferred price-inflation measure (core PCE) was up by 3.7 percent, year over year, in the most recent data from July. That’s the 65th month in a row during which price inflation came in above the Fed’s target rate of 2 percent. 

Nor should we expect much change in this trend so long as money-supply growth continues to accelerate as it has been doing for two years. July’s measure of money-supply growth—the most recent data available—showed growth at the fastest pace, year-over-year, in 59 months. Moreover, measured month-to-month, the money supply has increased during 11 of the past 12 months. 

More specifically, during July, year-over-year growth in the money supply was at 8.62 percent. That’s up from June’s year-over-year increase of 8.59 percent. Money-supply growth is also up sizably compared to July of last year when year-over-year growth was 1.46 percent. 

In July,........

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