Prices rose the most in the Inland Empire for Rent (+12.1%), Dining Out (+11%), and for Groceries (+7.8%) as of February year-over-year. In spite of nine separate rate hikes by the Federal Reserve between March 2022 and March 2023 which pushed the Fed Funds Rate higher by 4.75%, consumer prices keep rising as the purchasing power of the dollar continues to fall.
It's the money supply directions which are more of a root cause of inflationary or deflationary trends than consumer spending. For example, the M1 money supply (or liquid cash) rose from $4 trillion in January 2020 to $20 trillion by October 2021. As of January 2023, the M2 money supply actually contracted and went negative for the first time in 33 years. By March 2023, the money supply fell by -2.4% year-over-year.
All economic boom and bust cycles over the past 100 years were related to the flooding of the markets with easy money (boom) prior to the Fed and US Treasury slamming the figurative brakes on the access to capital (bust).
"M1 includes money in circulation plus checkable deposits in banks. M2 includes M1 plus savings deposits (less than $100,000) and money market mutual funds." - Clear Capital
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