Quote:
Originally Posted by BobGraves
The 2020's inflation is NOT transitory. It's just that the rate of increase has lowered. Prices are still high and there has not been a reduction in prices just a reduction in the rate of increase.
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Price levels have nothing to do with inflation.
Inflation is all about the rate of change of price levels.
The rate of change of price change is nearly back to where it was, which is the definition of transitory. . the arguments around transitory center around how long did it take. . there is a bit of a bull whip effect by the pandemic which is smoothing out as we get farther away from the pandemic and closer back to "normal"
Inflation - Wikipedia
The common measure of inflation is the inflation rate, the annualized percentage change in a general price index.[9] As prices faced by households do not all increase at the same rate, the consumer price index (CPI) is often used for this purpose.
however, you really do not want total economy price deflation, that is very bad for the economy.
the goal is disinflation from a high rate to a stable growth rate.
The target rate of 2% by the federal reserve is a bit low in my opinion, due to the employee behavioral bias of acceptable merit increases. The optimal point is where labor rate inflation is higher than the product inflation rate, and the net addition of the two is around 3%. . Then the economy has positive GDP momentum.
apologies if you still disagree. . .