Why inflation looks likely to stay above the pre-pandemic norm

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Many forecasters expect that annual inflation will soon ebb. Yet some indicators point to more price pressure to come in the near term

in many places is now even lower than it was in the early days of the covid-19 pandemic. “Real-time” economic indicators of everything from housing activity to manufacturing output suggest that economic growth is slowing sharply.

You might be forgiven for not taking these prognostications too seriously. After all, most economists failed to see the inflationary surge coming, and then wrongly predicted it would quickly fade. In a paper published in May, Jeremy Rudd of the Fed made a provocative point: “Our understanding of how the economy works—as well as our ability to predict the effects of shocks and policy actions—is in my view no better today than it was in the 1960s.

Inflation worry-warts can point to three other indicators suggesting that the rich world is unlikely to return to the pre-pandemic norm of low, stable price growth any time soon: rising wage growth, and increases in the Faster wage growth in part reflects public’s higher expectations for future inflation—the second reason to worry that inflation might prove sticky. In America expectations for average price increases in the near term are rising fast. The average Canadian says they are braced for inflation of 7% over the next year, the highest of any rich country. Even in Japan, the land where prices only rarely change, beliefs are shifting.

 

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We all know that prices don’t come back down after going up

IEAKwame

Cannot wait for UK to get the full blunt of the inflation,it will be between heating or eating in UK,next year.

This is the logical outcome when you stage a plandemic.

Clients have to put their prices up. To protect their egregiously outrageous lifestyles.

BillAckman Another factors fueling the inflation ligered longer is china gate that continue to contraint supply chain and ally the comsumer's will to spend more .

The Economist used to be a solid journal. It is now p.o.s. Milton Friedman has answer about inflation, and it is not caused by supply-chain, wage growth, monopolies, unions... Answer is simple & so is solution to stop inflation

Cycles is this: 2020: 'Stimulus' money injected into economy to pump up demand & employment +6mo: people realize they have money & begin spending +18mo: Businesses realize their costs rising 2022: Inflation appears Inflation ends 3 years *after* money-printing stops

soft core us govt propaganda

soon is relative. soon is like 5-10 years. first the free world needs to wean itself off russia and china, then off middle east oil. and build up nuclear and renewables. Putin and Xi have a 30 year headstart on the sleeping West.

GasStrike now

BillAckman Pre pandemic norm was not normal.

What a nonsense headline trying to have it both ways. Inflation is transitory just like they said you just needed to give it time what's not transitory is the price gouging inflation for instance on gasoline

BillAckman Note that BillAckman usually talks loudly in favor of his positions. What’s there to know if he has short positions and try to push the prices down publicly? Has he not done so in the past?

Isn't The Economist ac British publication?

So basically the forecasters are going to keep telling us inflation has peaked until they eventually are right and we’ll hear about how great the “experts” really are.

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