The Fed's rate hikes fail to address the root causes of inflation in housing, education, and healthcare. These sectors suffer from structural issues like regulation and bureaucracy. Higher rates can even be counterproductive, for instance, by stifling new housing construction, which restricts supply.

Viral posts comparing nominal prices from 1971 to today are misleading. The actual, inflation-adjusted data is more damning: home costs have doubled and healthcare has quintupled relative to a mere 20-30% rise in real family income, highlighting a targeted, systemic problem.

While deregulation has made consumer goods like TVs drastically cheaper, essential family needs like healthcare, education, and housing have seen costs skyrocket. This suggests market dynamics that work for consumer electronics fail to provide affordable necessities for the average family.

Technological innovation should naturally cause deflation (falling prices). The Fed's 2% inflation target requires printing enough money to first counteract all technological deflation and then add 2% on top, making the true inflationary effect much larger than officially stated.

A paradoxical market reality is that sectors with heavy government involvement, like healthcare and education, experience skyrocketing costs. In contrast, less-regulated, technology-driven sectors see prices consistently fall, suggesting a correlation between intervention and price inflation.

The CPI averages costs across 80,000 items, many of which are non-essentials or luxury goods. This method masks the true, higher inflation rate on basic necessities. For example, while the CPI showed a 72% cost increase over two decades, the actual cost of essentials like housing, food, and healthcare rose by a much larger 97%.

Despite official CPI averaging under 2% from 2010-2020, the actual cost of major assets like homes and stocks exploded. This disconnect shows that government inflation data fails to reflect the reality of eroding purchasing power, which is a key driver of public frustration.

Healthcare prices have risen 2.5 times more than groceries, but consumers are less sensitive to these increases. Unlike the frequent, tangible cost of eggs, infrequent medical bills make people "numb" to rising prices, masking a major source of inflation that policy changes can suddenly make visible.

Increasing the money supply doesn't lift all prices uniformly. It flows into specific sectors like finance or real estate first, creating asset bubbles and exacerbating wealth inequality, as those closest to the "money spigot" benefit before wages catch up.