What if Disinflation Turns Out to Be Transitory?

Published 18/09/2023, 07:36

Inflation has come down a great deal from its peak, but what if — in a total plot twist from the Fed's plan — disinflation is what turns out to be transitory?

Jesse Felder Post CPI Tweets

Certainly, there are important dynamics in commodities markets today that threaten to make the Fed’s job much harder.Jesse Felder Saudi Oil Tweets

In addition, a rising dependency ratio represents a structural tailwind to the inflationary impulse.

Jesse Felder Demographis vs Inflation Tweets

Meanwhile, the inflation already incurred by the economy may soon threaten the integrity of the “soft landing” narrative.Jesse Felder Tweet - Unemployment

Of course, the message from the bond market has not wavered. And, unlike economists, it has a perfect track record.Jesse Felder Tweets on US Bond Market

Perhaps it’s time for the “stagflation” narrative to make a comeback.

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