4 ms·
If inflation is 5% this year and 2% next year. Does that make the 5% spike transitory? It doesn't seem like it.
by hellothere1337 5y ago
If inflation is 5% this year and 2% next year. Does that make the 5% spike transitory? It doesn't seem like it.
- nostrademons 5y agoBy the Fed's definition, yes, that is exactly what they mean by "transitory".
- imtringued 5y agoCentral banks do inflation rate targeting. So for them "inflation" is the speed of inflation. Why do we not have price level targeting aka perfect price stability? (targeting the CPI index to always be at 100) Because we don't have negative interest rates. A slow down in the rate of inflation is considered disinflation.
- OJFord 5y agoYes, because it goes (made up numbers) from 2% to 5% and the back to 2%; it was only momentarily 5%, it was transitory, and it passed. If you're driving through some country roads at 60mph you might have a transitory period where you pass through a 30mph section by some little hamlet; when you resume 60mph you're behind schedule (if you planned not expecting the 30mph section) sure, but you're still moving at 60mph again.