IBTK - The Meaning Of Transitory

• Just because prices are going up doesn’t mean that inflation is. Inflation, after all, is the rate at which prices are advancing, not the fact that prices are rising in themselves.
• It makes no sense to claim that transitory includes all versions of the world in which inflation does not stay at, or make, new cyclical highs on a sequential basis.
• In this sense, recent curve flattening and sustained rise in short-term rate expectations could also be bond markets discounting a world in which inflation stays high enough to prompt policymakers to withdraw policy stimulus quickly enough to dent growth and tighten financial conditions.

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