All About Inflation

Check out the accompanying pdf and chart collection. Executive Summary: To answer whether the latest bout of inflation in general will prove persistent or transitory, we must look deeper than the headline rate. Core rates exclude energy and food, but shelter arguably should be excluded to get the answer, as it too is still distorted by temporary pandemic-related factors. The resounding message we hear from September’s CPI data: Both headline and core CPI rates—ex shelter—were 2.0% y/y in September. That’s the Fed’s target rate (albeit for the PCED). For us, that’s confirmation enough that inflation is moderating. It’s transitory, not persistent. Then again, some will see signs of persistent inflation in the data details. ... And: Dr. Ed reviews “Somewhere in Queens” (+).