Axios reports that while “top policymakers warned that the ‘last mile’ of getting inflation back to 2% would be most challenging,” the finish line “is in sight and disinflation looks to still have momentum to carry through.”
The story points out that “beating inflation in America has not become more difficult as the fight winds down. Rather, supply-side rebounds and strong productivity gains have surprised top economists, who expected economic pain might be necessary to get inflation all the way back to the sweet spot central bankers aim for.”
The trends have been helped by labor markets that “have loosened up, helped by a larger supply of workers who came off the sidelines. Stronger wage gains have been paired with strong productivity growth … That’s been met with a more benign inflation environment. If forecasters are correct, the Personal Consumption Expenditures Index — the Fed’s preferred inflation gauge — might fall to 2.8% in the 12 months through November. Excluding food and energy prices, it is on track to slide closer to 3.4%.”
KC’s View:
The reality is that the finish line really hasn’t been reached until everybody reaches it – and that while the economy is much better than anyone expected it would be just a few months ago, it still isn’t great for some folks, and remains problematic especially for people dealing with higher food prices.
Some of this has to do with who is telling the story, and which narrative is getting through. See Scott Moses’ column above, and my response to it.
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