My feeling is that although it is too early to declare victory over high inflation rates, I think we are closing in on closer to “normal” dynamics — by the standards of the post-1990 era. I believe that there are still areas of stronger pricing power, but some of the excesses have been unwound, so that we end up with more mediocre inflation prints. At least we would if the housing component of CPI — constructed to be a very slow-moving series — settles down. The market rent series that I have seen (but I do not have access to) suggest that it will settle down, but that will be a mid-2023 story.
Lagging Economic Indicator Still Lagging
Lagging Economic Indicator Still Lagging
Lagging Economic Indicator Still Lagging
My feeling is that although it is too early to declare victory over high inflation rates, I think we are closing in on closer to “normal” dynamics — by the standards of the post-1990 era. I believe that there are still areas of stronger pricing power, but some of the excesses have been unwound, so that we end up with more mediocre inflation prints. At least we would if the housing component of CPI — constructed to be a very slow-moving series — settles down. The market rent series that I have seen (but I do not have access to) suggest that it will settle down, but that will be a mid-2023 story.