4 ms·

Maybe I do not understand you correctly, but the 4.2% is YoY.

• frankbreetz 5y ago
  They are considering this "Transitory" meaning they think it will drop with no changes to the Fed's behavior. Yes, 4.2% is high inflation, but it has been lower then target for years now, so you might consider this "reflation", or higher then normal inflation in order to catch up to normal after years of lower then normal inflation. Also, as another comment points out most of this increase comes from increases in used automobiles, gasoline, and airline fares. This can all be explained by supply issues and large drop in those item last year at this time. The Fed's behavior have minimal effects on that.
  • dragonwriter 5y ago
    > Yes, 4.2% is high inflation, but it has been lower then target for years now, so you might consider this "reflation" That’s not really an argument that it factually is transitory, and I don’t think there is any real good reason to think “catch-up” inflation is any better than the regular kind. (OTOH, the context of the COVID rebound is a strong reason to think it is likely transitory.)
• dragonwriter 5y ago
  Its YoY but its still viewed as transitory. Given that the period also saw the economic rebound from the COVID sharp drop, including the fastest quarter of economic growth ever recorded in the US, followed by two more unusually strong growth quarters, it’s not hard to see why. Unless that’s a sustained trajectory rather than just a rebound from one-time impairment, you wouldn’t expect strong demand-pull inflation to continue.