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Raphael Bostic speaks to members of the Harvard Business School Club of Atlanta at the Buckhead Club in Atlanta, Georgia on Feb. 19, 2020. Photo: Elijah Nouvelage/Bloomberg via Getty Images

In a recent speech, Atlanta Fed president Raphael Bostic brought out the swear jar he keeps in his office. Except this jar is a swear jar with a difference: Staffers (and, of course, Bostic himself) have to put a dollar in every time they use the dreaded word "transitory."

Why it matters: As White House press secretary Jen Psaki says, no one really knows what the t-word word means.

  • It's generally (over)used in the context of inflation — with the idea being that if inflation is transitory, then the Fed doesn't need to do anything about it, because it will naturally move back down to its long-term trend anyway.
  • The problem is that the "transitory" thesis is unfalsifiable, both in theory and in practice — at least if you think that above-trend inflation for a year or two can count as transitory.

The big picture: Insofar as inflation is being driven by supply-chain disruptions and/or labor shortages, it's hard to see how monetary policy could bring it down in any event.

  • My thought bubble: Maybe what Bostic really needs is not a swear jar so much as the serenity to accept the things he cannot change.

Go deeper: Bloomberg's John Authers has a deep dive into the most recent inflation figures. They're very high on a 12-month basis, but unexceptional on a 24-month basis, compared to a pre-pandemic baseline.

Go deeper

This is what a profit margin squeeze looks like

Expand chart
Data: U.S. Bureau of Labor Statistics; Chart: Jared Whalen/Axios

Two inflation indexes out this week, taken together, show how companies’ margins are getting squeezed.

Why it matters: Corporate earnings growth, while still historically high, is receding from record second-quarter levels. Margins will be a huge focus during Q3 earnings calls this month.

Updated 1 hour ago - World

North Korea claims latest missile test new weapon launched from submarine

North Korean state media claims the country's military fired this missile on Tuesday. Photo: Korean Central News Agency

North Korean state media announced that a detected ballistic missile launch off its east coast on Tuesday was a newly developed weapon test-fired from a submarine.

Why it matters: Pyongyang's latest in a series of recent missile launches into the sea happened hours after U.S. officials emphasized their commitment to restart negotiations on North Korea's nuclear weapons program, which have stalled since talks broke down during the Trump administration, AP notes.

3 hours ago - Politics & Policy

Manchin's massive means test

Illustration: Aïda Amer/Axios

Sen. Joe Manchin (D-W.Va.) is offering progressives a trade: He'll vote for their cherished social programs if they accept strict income caps for the recipients, people familiar with the matter tell Axios.

Why it matters: Manchin’s plan to use so-called means-testing for everything from paid family medical leave to elder and disabled care would drastically shrink the size and scope of the programs. It also would bring a key moderate vote to the progressive cause.