The more people behave as if high inflation is here to stay, the likelier it is to stay

 We May Be Getting Used to High Inflation, and That’s Bad News. That would force the Federal Reserve to choose between inducing a potentially deep recession to force inflation lower, or giving up on its 2%  

Core inflation was 5.5% in April, down from 5.6% in March. 

On a monthly basis, core prices rose 0.4%, equivalent to 5% at an annual rate

Wages, which strongly influence service prices, grew 4% to 5% through the first four months of the year, too high to be consistent with 2% inflation.

In such a situation, it can take a deep recession to get inflation down. This seems to be why markets think inflation will drop sharply in the coming year and the Fed will start to cut interest rates. Yet thus far there is no evidence of even a mild recession.

Greg Ip WSJ 10 May 2023

Erik Thedéen är överraskad. Räntehöjningarna från Riksbanken har inte bitit

SvD 12 maj 2023


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