Inflation is felt immediately as change in price of things that one frequently buys. Everyone can empirically determine if they are experiencing inflation without consulting the news or any authority. And the basket that an authority uses to determine the "official" inflation numbers is less representative of its impact on an individual than their personal basket.
Then there is the outlook on inflation, which most lay people were not thinking about until recently. Most people think of longer term inflation as "economy good" or "economy bad", and often falsify their true outlook, instead signaling a political allegiance. In 2025, Trump is in office, so Democrats might signal "inflation go up, economy bad", and they would have signaled "inflation go down, economy good" when Biden was in Office a year ago. The reverse is true of Republicans.
Now, everyone expects inflation to continue and even accelerate in the long term. And people are worried enough to take action in the form of more loans, more investments on margin, holding less dollars, etc. And now everyone knows that everyone else is doing this, which is the "emperors clothes moment".
People are much less likely to be taken seriously if they express that inflation will mostly be a function of who is in office, rather than an inevitability of the American political system. If someone you cared about expected there to be no inflation, you might become concerned for their ability to financially plan.
So now we all know, and we know that everyone else knows, and we aren't trying to hide our outlook on inflation in conversation because it's now worse to look stupid on this topic than miss a signalling opportunity.
TLDR: what was once a low consequence signalling opportunity, is now part of serious financial planning.
Inflation is felt immediately as change in price of things that one frequently buys. Everyone can empirically determine if they are experiencing inflation without consulting the news or any authority. And the basket that an authority uses to determine the "official" inflation numbers is less representative of its impact on an individual than their personal basket.
Then there is the outlook on inflation, which most lay people were not thinking about until recently. Most people think of longer term inflation as "economy good" or "economy bad", and often falsify their true outlook, instead signaling a political allegiance. In 2025, Trump is in office, so Democrats might signal "inflation go up, economy bad", and they would have signaled "inflation go down, economy good" when Biden was in Office a year ago. The reverse is true of Republicans.
Now, everyone expects inflation to continue and even accelerate in the long term. And people are worried enough to take action in the form of more loans, more investments on margin, holding less dollars, etc. And now everyone knows that everyone else is doing this, which is the "emperors clothes moment".
People are much less likely to be taken seriously if they express that inflation will mostly be a function of who is in office, rather than an inevitability of the American political system. If someone you cared about expected there to be no inflation, you might become concerned for their ability to financially plan.
So now we all know, and we know that everyone else knows, and we aren't trying to hide our outlook on inflation in conversation because it's now worse to look stupid on this topic than miss a signalling opportunity.
TLDR: what was once a low consequence signalling opportunity, is now part of serious financial planning.
Why is now different than any other time in the last 50 years?