Inflation Soars Then Cools, But Will Relief Last?
• Inflation rose rapidly in 2021-2022, putting strain on households, but cooled unexpectedly quickly in late 2023. The question now is whether the disinflation will persist.
• The details suggest moderating goods prices and slowing services inflation helped drive the cooldown, even as rent increases remain sticky.
• "Disinflation" refers to slowing price increases, not outright falls. Prices remain higher than pre-pandemic.
• The Fed aims to return inflation to 2% yearly. That's considered consistent with sustainable growth.
• Risks still loom of inflation heating back up, so forecasters are monitoring areas like rents closely for signs of further moderation.