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  • Writer's pictureEdward Ballsdon

US Inflation Trends


  • Until recently, the US experienced a 30 year period of stable low core inflation.

  • The recent spike was led by an immediate increase in Choice inflation, followed by Burden inflation.

  • Choice inflation has subsequently declined almost back to its 20 year range.

  • Burden inflation has also peaked but will disinflate at a slower rate (due to the way it is computed).

  • Tight monetary policy has caused a fast deterioration in monetary and consumer debt aggregates.

  • Monetary policy objectives target lagging indicators, raising the likelihood of higher rates for longer.

  • Current trends suggest a continued disinflationary trend.

  • Markets currently price stable inflation at ~2.65% for the next 10 years which is inconsistent with past episodes of monetary tightening.

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