It is not good for the Biden administration to see similarities between current inflation surge and patterns seen in the 1970s, according to a former Reagan Economist Art Laffer.
ART LAFFER: I don"t know what this administration is doing to tame it inflation Whatever they do is way beyond my Ken, just for the record. If I can, producer price index tends to be highly volatile over the years, and only when we are coming into serious periods of inflation, long-term inflation, consumer price index tends to go along with a wholesale price index or producer price index. This is the type of pattern that we saw in the 1970s, up until 1981 - 82. That's the pattern. We have not had that pattern in the past at all. interest rates have been low. Inflation has been low. All of that, that appears to be changing dramatically. The producer price index is rising according to the consumer price index. Both of these are very bad signs for inflation going forward. I don't think Janet Yellen knows what to do. I don't think she can do anything. I think she'll try to do something very dramatic, but it doesn't look good for this administration on inflation.