Oh behave/The Jane Fraser lay of the land/And other noteworthy stuff

We know for many years that the Bank of Japan has been wanting higher inflation, something sustainable around 2%. They've actually now gotten it in every month since March 2022 with inflation above 2% but they still only have their overnight rate at just .25%. What they and other central bankers still don't realize, even after the last few years, is that while the average person of course does not like high inflation, they don't even want a 2% rise in their cost of living. 

If you didn't see in the Financial Times this week, there is an article titled "Tokyo Bans Harassment of Staff by Customers." It says, "Tokyo will become the first part of Japan to ban customer harassment of service workers amid a perceived worsening of consumer behavior that some analysts say is linked to the return of inflation."

This is meant to "tackle customer nastiness known by the abbreviation 'kasu-hara'...Now that sustained inflation has returned, senior executives in the restaurant, hospitality and retail sectors say customers are unhappy."

This was a quote in the article from Jesper Koll who is a Japanese based economist, "During the decades of deflation, customer satisfaction and happiness was built in. Now that prices are going up - and going up not just once but more or less consistently - Japanese feel cheated. Under deflation, the customer was always king. Under inflation, they are taken for a fool." https://www.ft.com/content/f48b9af5-d48c-45c3-a9cd-6d34b3759202

My point here is too many think about inflation simplistically. High inflation bad, 2% good. All deflation bad. It's not that simple. Lower prices are why the technology in your hand is so cheap. Lower prices are why Walmart and Amazon are the two biggest employers in the country. Deflation is really only bad for those that have too much debt to service and for those companies that don't have productivity and volume levers to pull. The consumer loves deflation. 

Speaking of inflation and how the US consumer feels about, in the NY Fed's Consumer Expectations survey out yesterday, the one year expectation for it remained at 3%. It rose to 2.7% from 2.5% for the 3 yr view and up by one tenth to 2.9% for the 5 yr guess. The 2 tenths rise for the 3 yr view was "most pronounced for respondents with at most a high school degree" and likely a cohort that is feeling the inflation pain the most.