- This morning’s CPI came in at 7.5%, hotter than expected. Not really that surprising.
- If some prices fall (commodities and car prices), then the back end of the year is going to see inflation decelerate back into that 3-4% core PCE range pretty quickly. In any case, inflation is going to be high all year long.
- The big lesson from the COVID recession was that fiscal policy is the big bazooka. That bazooka can get us out of a deep rut, but it can also cause bigly inflation as we’re seeing now.
For further details see:
3 Things I Think I Think - All About Inflation