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> Inflation isn't high any more. The CPI was 255.7 in 2019 and estimated to be 294.4 for 2022. That's a 15% increase in three years in an index that's acknowle
by prottog 4y ago
> Inflation isn't high any more.
The CPI was 255.7 in 2019 and estimated to be 294.4 for 2022. That's a 15% increase in three years in an index that's acknowledged to somewhat under-report inflation. CPI could flatline (zero MoM) for the next two years and we would still be at 3% annual inflation over five years, which is above the Fed's target, in addition to all the asset inflation we've had that the CPI doesn't really track. Absolutely nobody who pays real bills will feel like inflation has subsided.
> IMHO we are going to go back to worrying about deflation in the next 12 months or so.
There's a lot of money to be made in the STIRS markets if your prediction comes true.
- treis 4y ago>That's a 15% increase in three years Which means it's high over the last three years. It doesn't mean it's high today.
- prottog 4y agoYou're right, but it's going to take either a while or actively lower prices before people will stop feeling like everything is more expensive than it should be. Psychology matters for the effects of inflation on the macro economy. I've definitely altered my purchasing behavior because things "feel" too expensive, and a few months of 0% MoM inflation isn't going to change that. Either in two years I'm going to finally get used to a cart of groceries costing $250, or prices come down sooner.
- foobarian 4y agoDon't forget the impact of COVID measures, which had a huge once-in-a-lifetime effect that is now going away.