Inflation Here & There

Check out the accompanying pdf and chart collection. Executive Summary: High rates of US inflation are one of the pandemic’s many shockwaves. As these continue to recede, so should inflation—and without further Fed tightening. Goods inflation already has plummeted from 14.2% y/y at its peak to 0.6% in May. High rent inflation is buoying the headline CPI rate, but it should normalize as pandemic effects fade. … In Europe, elevated inflation rates are dropping as well, even though the war in Ukraine grinds on. … In China, inflation isn’t the problem; post-lockdown economic weakness is. The ailing property market doesn’t help. The PBOC is easing in response.