The narrow issue of whether this inflation is in any meaningful sense “transitory” has now been settled. It isn’t. Now for the much tougher questions of how long it will last, how bad it will be, and what to do about it.
The trimmed mean is 5.3 standard deviations above its norm for the last 10 years, considerably more than the headline rate.
“CPI excluding everything you’d like to exclude” rose last month to exceed 4% for the first time since 1991.
For the next few months, with the “transitory” debate over, one topic will dominate the debate — rents. Shelter accounts for 32.5% of the headline CPI, and to date inflation in rents has been unremarkable.
John Authers Bloomberg 11 november 2021
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