> Except that the narrative around demographics and technology has shifted to support higher inflation. We don't understand the drivers of inflation very well

> Except that the narrative around demographics and technology has shifted to support higher inflation. We don't understand the drivers of inflation very well and people have different theories on this. You may be correct though. Fundamentally inflation is driven by the change in the supply and demand for goods and services, and in a globalised world with rapidly changing geopolitical landscapes and technological advancements it's hard to predict actually how supply and demand pressures will balance out in the coming years. However, what we do know is that demographics have historically correlated well with inflationary pressures. The inflation in the 70s was likely in part driven by the huge growth in demand which came from the baby boomers entering the economy. Then more recently you have examples like Japan where demographics have clearly played a role in their sluggish economic growth and low inflation. But to be clear, I'm not saying the market is necessarily right in its pricing, I'm just suggesting that there's a lot of good reasons to believe the Fed funds rate is currently too high and will need to come down. Even if you're correct you would still have to explain why inflation rocketed up in 2021 right after trillions of dollars of stimulus entered the economy. The trends you're describing have been in place for years. The inflation we've seen over the last couple of years in my opinion is just far easier to explain via the combination of reckless monetary policy, fiscal stimulus and lockdown policies.