Why some analysts believe the Consumer Price Index formula understates inflation while others believe the CPI formula overstates inflation. What really matters to us individually when it comes to inflation. Topics covered in this episode include: What is inflation and what causes it.How is the Consumer Price Index calculated and how has the CPI formula changed over time.What are examples of different CPI measures.Why do some analysts believe U.S. inflation is higher than what CPI states while others believe inflation is lower than what the Consumer Price Index shows.How inflation calculations impact the measurement of other economic data such as the rate of poverty and the growth in real wages.What are consumer attitudes toward inflation and why do central banks worry about changes in household and business inflation expectations.How individuals can monitor and improve their cost of living. Thanks to Sleep Number and Money For the Rest of Us Plus for sponsoring the episode. For show notes and more information on this episode click here. [0:18] Traditional methods of measuring inflation.[4:00] The CPI has changed from a fixed-basket approach to a consumer-representative approach.[6:39] The controversy concerning the accuracy of CPI measurement.[9:11] Is inflation overstated because of how the CPI-U is calculated?[11:23] Rwanda case study: the connection between inflation and poverty.[15:17] Why governments care so greatly about the public’s view of inflation.[17:31] How inflation expectations are measured.[18:52] How do we calculate the desired standard of living?[20:41] The CPI isn’t an accurate depiction of the standard of living.[24:20] Are you satisfied with how you spend your money?See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

How a liquidity crunch in the short-term lending markets sent interest rates soaring. Why this is a huge blunder on the part of the Federal Reserve, and what it means for us as individual investors. Topics covered in this episode include: What are repurchase agreements and how are they used to finance U.S Treasuries.How outflows from money market funds and hoarding by banks led to a liquidity crunch that caused repo rates to spike to 10%.Why banks are hoarding reserves held at the central bank even though there are over $1.4 trillion of them, up from $20 billion in 2007.How quantitive easing increases reserves and quantitative tightening reduces reserves.How the Federal Reserve was able to stop the disruption in the repo market, even though the central bank was caught off guard and could have prevented it.How individual investors can protect themselves from unintended consequences arising from the unconventional policies and experiments being conducted by the Federal Reserve and other central banks. Thanks to The Great Courses Plus and LinkedIn for sponsoring the episode. For show notes and more information on this episode click here. [0:20] The Fed loses control over policy rates, and repo interest rates soar.[2:19] What is a repurchase agreement (repo)?[5:02] Why the big players in repos pulled back on Sept. 16th.[8:38] Banks need more liquidity because of regulations.[12:53] Why reserves have fallen so low.[17:43] How does the reserve balance get reduced?[19:23] The Fed may have shrunk it’s balance too far.[21:36] What can be done about the reserve shortage?[24:17] What can we learn from the repo rate raise?See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.