Why Inflation Affects Confidence So Much

If you are like me and like to look at long-term charts, you may have noticed something peculiar about consumer confidence. While the economy is arguably doing better than in 2008 and other major recessions, consumer confidence is so low, it can only be compared to the levels seen in the 1970s. Of course, the driver this time is inflation, not a decline in growth, but why does sentiment react so much stronger to inflation shocks than a regular recession? Read Full Article »